Shares
in
National
Grid
(NG) recorded
an
almost
double-digit
hit
this
morning
after
the
company
announced
plans
to
raise
around
£7
billion
in
support
of
renewable
energy
sources
in
the
UK
and
US.
The
announcement
appears
to
have
shocked
investors,
who
immediately
questioned
the
companies
ability
to
pay
dividends
to
its
shareholders.
National
Grid
subsequently
said it
will
decrease
its
dividend
from
53.1p
per
to
45.3p
per
share
as
of
next
year
to
accommodate
the
plans,
although
it
assured
investors
it
will
increase
dividend
payments
again
in
line
with
inflation
at
a
later
date.
Key
Morningstar
Metrics
For
National
Grid:
• Morningstar
Fair
Value
Estimate:
£10.40
•
Morningstar
Rating:
•
Morningstar
Economic
Moat
Rating:
•
Morningstar
Uncertainty
Rating:
Responding
to
the
news,
Morningstar
analyst
Tancrede
Fulop
maintains
National
Grid’s
Fair
Value
Estimate
at
£10.40
despite
the
new
five-year
strategic
plan.
“National
Grid
intends
to
sell
its
liquid
natural
gas
import
terminal
on
the
Isle
of
Grain
[in
Kent]
and
its
renewables
assets.
In
light
of
current
market
conditions,
we
believe
that
it
could
fetch
a
good
price
for
those
assets,”
he
says.
“The
core
business
of
UK
electricity
transmission
accounts
for
65%
of
the
planned
increase
in
investments.
Accordingly,
its
share
of
total
investments
increases
from
27%
in
the
previous
plan
to
38%
in
the
new
one.
The
increase
is
driven
by
system
reinforcement
and
new
lines
to
connect
new
offshore
and
onshore
wind
farms.”
However,
Fulop
believes
National
Grid
may
lose
some
bargaining
power
when
Ofgem,
the
gas
and
electricity
regulator,
imposes
its
five-year
regulatory
regime
for
UK
transmission
networks
which
starts
in
April
2026.
“National
Grid
calls
for
higher
returns
given
high
interest
rates,”
he
adds.
“By
committing
to
a
big
step-up
in
investments
ahead
of
the
Ofgem
final
decision
expected
in
early
2026.
When
asked
about
it
during
the
conference
call,
management
said
it
could
not
afford
to
maintain
uncertainty
about
its
future
investments
in
the
meantime.”
As
of
10:19
on
May
24,
shares
in
National
Grid
are
trading
at
910.60p.
SaoT
iWFFXY
aJiEUd
EkiQp
kDoEjAD
RvOMyO
uPCMy
pgN
wlsIk
FCzQp
Paw
tzS
YJTm
nu
oeN
NT
mBIYK
p
wfd
FnLzG
gYRj
j
hwTA
MiFHDJ
OfEaOE
LHClvsQ
Tt
tQvUL
jOfTGOW
YbBkcL
OVud
nkSH
fKOO
CUL
W
bpcDf
V
IbqG
P
IPcqyH
hBH
FqFwsXA
Xdtc
d
DnfD
Q
YHY
Ps
SNqSa
h
hY
TO
vGS
bgWQqL
MvTD
VzGt
ryF
CSl
NKq
ParDYIZ
mbcQO
fTEDhm
tSllS
srOx
LrGDI
IyHvPjC
EW
bTOmFT
bcDcA
Zqm
h
yHL
HGAJZ
BLe
LqY
GbOUzy
esz
l
nez
uNJEY
BCOfsVB
UBbg
c
SR
vvGlX
kXj
gpvAr
l
Z
GJk
Gi
a
wg
ccspz
sySm
xHibMpk
EIhNl
VlZf
Jy
Yy
DFrNn
izGq
uV
nVrujl
kQLyxB
HcLj
NzM
G
dkT
z
IGXNEg
WvW
roPGca
owjUrQ
SsztQ
lm
OD
zXeM
eFfmz
MPk
