Wednesday, November 15, 2017

Recent Buy - National Grid PLC (NGG)

Yesterday, I decided add to my relatively small position in NGG.  The price fallen nearly 5% since I initiated a position earlier in the year. Here the details of the purchase:



Purchased: 14 shares x $58.85 = $823.90 (+$4.95 commission)

Dividend Income: $40.74 (~$2.91/sh annually; paid semi-annually in Jan. and Aug.)

P/E ratio: 18.2 (vs. S&P @ 22.3)

Debt to capital < 50%: No, ~53.5%

Interest coverage ratio of at least 3:1: Yes, 3.2x

S&P and/or Moody's credit rating of BBB+/Baa1 or better: Yes, BBB+

Current dividend yield > 1.5x S&P yield: Yes, 4.93% vs. S&P @ 2.0%

Payout ratio < 60% (or <85% for utilities):  No, 89%

Comments: Morningstar.com lists the Forward P/E at 13.0 and current Price/Cash Flow at 6.0



Company Profile
National Grid plc transmits and distributes electricity and natural gas. It operates through UK Electricity Transmission, UK Gas Transmission, and US Regulated segments. The UK Electricity Transmission segment owns and operates electricity transmission networks, which comprise approximately 7,200 kilometers of overhead line; 1,500 kilometers of underground cable; and 342 substations located in England and Wales. It also operates the Scottish networks. The UK Gas Transmission segment owns and operates gas transmission systems that include approximately 7,660 kilometers of high pressure pipe and 618 above-ground installations in Great Britain. The US Regulated segment jointly owns and operates transmission facilities across upstate New York, Massachusetts, New Hampshire, Rhode Island, and Vermont; and owns and operates electricity distribution networks in upstate New York, Massachusetts, and Rhode Island. Its assets comprise 14,219 kilometers of overhead lines; 377 transmission substations; and 763 distribution substations. This segment also engages in owning and operating of gas distribution networks, which deliver gas to approximately 3.6 million customers in upstate New York, New York City, Long Island, Massachusetts, and Rhode Island. The company is also involved in gas metering, property management, liquefied natural gas (LNG) importation terminal, unregulated transmission pipeline, and LNG operations, as well as operates Great Britain-France interconnector. In addition, it owns and operates 21 megawatts of solar generation in Massachusetts. National Grid plc was founded in 1990 and is headquartered in London, the United Kingdom.

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