Stock to Consider: National Grid (NGG:N)


One of my long-term stocks that is little-known in Canada is National Grid (NG:LSE; NGG:NY). It first came to my attention in a single paragraph mention in Canadian Business magazine. It is a UK-based electricity supplier that supplies most of the UK with electricity and natural gas as well as electricity generation and supply in the US Northeast.

I first bought some shares in about 2010 as the price had been beaten down and it was yielding in the 7.5% range. I love utility stocks as they are generally quite boring but are steady. The dividends rarely decrease, the customers rarely leave (oftentimes they are a monopoly), and their prices are fairly stable.

One of the reasons I was attracted to this stock, besides the high dividend yield due to the depressed share price, was because it is a good utility and gives me exposure outside of North America.

According to this article, Newsweek ranked them the top green utility in the world as they have been implementing various environmental efficiency and sustainability initiatives.

The stock is trading in the $67 range, down from its peak of $80 in 2007-2008 and below its 2 year high of about $76 in the summer of 2014. I picked up a bit in the winter when it dipped below $65. At the current price it yields 4.3%. It hasn’t had a ton of coverage in Stockhouse or in the financial press which surprises me as I rather like this one. I had read in some UK publication-or-other that the company’s goal is to increase its dividend every year to at least keep up with inflation. This is a very good thing for a long-term stock. From what I gather it is a foundation stock for a lot of UK investors and they are sensitive to the need of retirees to have their incomes keep pace with inflation.

This is not meant to constitute investment advice. Please do your own research before making any investment.



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