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25/2/2021
13:51 | pierre oreilly: O/T, Hope no one minds.
Ben - i'm watching pennon pnn. Almost certainly going to buy just after they get demoted from the 100 at the next review. i think ftse100 insts are shorting off their holding atm, hence waiting. Special situation, but i view the lowered divi extremely safe. I'll do it anyhow, but appreciate your view of it.
Psychologically, it's an easy buy for me because i sold last year at 40% higher than it is today. Sum of parts (including 3bn cash i think) much higher than the cap. Sold due to maths of disposing of a business not making any sense and price high). Buying partly because you sold higher shouldn't make any difference of course, but it does to me!
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24/2/2021
08:10 | pierre oreilly: Ah, sorry, I thought the mention of actual prices this would go to was based on some actual quantitative analysis resulting in numbers popping out at the end. Fair enough if it's just finger in the air speculation. I'd say the speculation that if the Divi goes down x%, then the shareprice will go down x% is pretty simplistic. No one knows of course, but with divis getting chopped left right and centre in blue chips, I think lower yields (i.e %price dropping less or increasing more than the divi) will be the norm for the lot of them. Pension money institutions take has to go somewhere. The quality of its earnings will keep its relative performance up there with the best.I have a gilt maturing which has been the largest contribution to my income for the last 20 years. It concentrates the mind when a big lump of cash arrives n the ISA and it has to be invested somewhere, else sit there earning nothing. To my mind, the income from ng is safer then just about anything else, and will be a relatively high and safe compared to other opportunities at the moment (for those looking for an income).
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24/2/2021
00:51 | mark1000: Pierre if and its a big IF NG have to cut Divi's we would see the share price fall how big a fall we can speculate but to assume it falls by say 10% or more it would take us into the 7.00 to 7.50 range it will hurt sentiment greatly. I think you will agree that as a utility the dividend is the most important stick to measure this Company by and why we all hold the share. Good point Newbank I do agree they can pay the dividend even if they appeal but they may still have to throw a questionmark over future dividends if their appeal is not successfull they can hardly say we will continue to payout and grow dividends regardless of the result of the appeal. The market hates uncertainty and thats why the share has under performed against the market.
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23/2/2021
23:56 | newbank: Hi All,
We can only wait for the decision whether to refer to the CMA or not, which NG will announce to the City soon.
No point speculating on dividend, because when the water industry referred Ofwats decision to the CMA and won, there was no reduction in dividends at all.
Bear in mind final dividends resulting from the final results is what has been earned from RIIO I.
If you look at SVT (Severn Trent), they actually increased their final dividend by 7.5%
I don't want to speculate, but if NG did appeal then it may not be that bad a deal, as Boris's future plans for a greener energy system can be put into jeopardy if NG are not singing from the same hymn sheet, so to speak. With the massive Climate Change World Conference in Glasgow in Nov, Boris won't give up the opportunity to be seen as a world Statesman fronting a new greener world, giving him a boost in status which personifies his whole personality. AIMO
Not long to wait.
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23/2/2021
12:20 | mark1000: Boystown a lot of risk on this share at the moment as I see it the crucial decision do they appeal or not the Ofgem 5 year price deal. If they do they can hardly keep pressing on with the current divi they have to at least pending the decision hold back part of the divi. This shares all about the divi so reduce the divi by 20% expect the share price to fall by 20%. My hope is they accept the Ofgem deal and reconfirm that they will continue the current dividend policy. I think taking away these uncertainties would take us back over 9.00 if they appeal we could see 7.00 IMHO.
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10/2/2021
14:19 | mark1000: It might sound strange but I do not want NG to appeal the OFGEM decision re the 5 year contract instead I want a statement saying that the settlement though tough the board will continue with the current dividend policy with RPI inflation increases. When the 5 year dividend track is made clear we will see the share price back in the range 9.20 to 9.80 and higher in the run up to the June div back over 10.00.
If they appeal the OFGEM decision they are almost duty bound to hold back at least part of the June divi pending the decision. Then if the appeal goes well the divi can be restated in full if the appeal fails then a reduced divi even if NG could afford to pay out the full divi.
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09/2/2021
16:44 | lennonsalive: OFGEM a niggle and always will be since I started work for the gas in 97, but BG/Transco/NG. always survived and have delivered slow boring growth and go dividend.
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09/2/2021
16:15 | mark1000: Bond rates may be part of the reason but I give more weight to the following.
The exchange rate with the dollar has reduced GBP Group profits by say 5% as the £ has strengthend by say 10%.
The recent OFGEM settlement with a question mark over an appeal leaves the all important question will the divi be maintained will it continue to grow as often said the market hates uncertainty.
This share is supposed to be safe and boring the last eighteen months has shown this not to be so. You had a Labour Party wanting to renationalise without fair compensation. Ofgem is in a war with NG to drive the hardest possible bargain to get a settlement. Now headlines about spliting part of NG.
Folks accept lower returns on Utilities because of boring predictability take that away folks want higher returns this translates to a lower share price
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13/1/2021
20:55 | gateside: Dividend paid today and reinvested back for more NG. shares
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28/11/2020
17:05 | unastubbs: 27 Nov 2020
Questor says: sell National Grid, buy Gore Street Energy Storage
National Grid had seemed the perfect income stock: its customers have no choice but to use its infrastructure and the stable revenue streams that result should likewise result in stable dividends for us.
That’s the theory. In reality the firm is subject to outside forces such as regulators and politicians. Neither put the needs of income investors at the top of their priority list.
Grid is heavily controlled in terms of the returns it is allowed to make and there are fears that a new regime to be announced by regulators next month will give it even less room for manoeuvre.
The danger, Questor believes, is that too strict a regime will lead to either an imminent dividend cut (very bad) or a more rapid rise in the company’s debts as it maintains a divi unsupported by its profits (hardly less bad in the long term).
We have therefore decided to bite the bullet before the new regulatory regime is announced and sell Grid now, even at the price of a 17pc loss. What will replace it?
National Grid is, as we said, a monopoly so there are no similar London-listed stocks we can buy; neither in all probability would we want to. But we have found something that is also part of the electricity supply network – indeed it is a supplier to National Grid itself – but avoids, we think, the risk of regulatory interference.
This stock is the Gore Street Energy Storage Fund, whose assets are, in essence, hi-tech batteries that can store large amounts of electrical energy.
It enters into contracts, via auction, with National Grid and its Irish equivalent; under these contracts it helps the grids to balance supply and demand by storing excess electricity generated elsewhere or by supplying it when there is not enough being provided by other generators. These contracts reap regular fixed sums irrespective of how much Gore Street’s assets are used by the grids.
It could also make money opportunistically by buying electricity when it’s cheap, perhaps at night, and selling it at a profit later when demand is higher. However, all of its money is currently made from those contracts with the grids, which are of course a more reliable source, not least because some last six years.
The fund has been growing steadily since it listed in May 2018 – it started with two energy storage units and now has 14 – and the potential is clear: the supply of electricity to the grid is becoming more unpredictable as more is generated by sun and wind, and less by coal and gas, while demand for electricity is also becoming more unpredictable because of the rise of electric vehicles.
The need for dedicated “bufferingR21; services along the lines of Gore Street’s is clear and seems only likely to grow as renewables and electric vehicles alike become more prevalent.
Currently the fund focuses on Britain and Ireland but is pursuing further opportunities in Western Europe and America. Its pipeline of planned expansion will almost triple the storage capacity of its assets. It is able to borrow or “gear” up to 15pc of its asset value but has not used any gearing so far.
The fund targets a dividend of at least 7p a share. It hit the target in the full year to March and is off to a good start in the current year with a 2p payment last month. At the current share price of 106p, a 7p divi represents a yield of 6.6pc. As this is higher than Grid’s current yield of 5.5pc, our portfolio will get an income boost from the switch.
In detail, our stake in Grid is worth £19,100. Reinvesting that sum in Gore Street will get us 18,019 shares, which if we get the 7p divi will mean annual income of £1,261. In the past year Grid has paid 49p in divis, or a total of £1,062 on our stake.
This boost comes despite the fact that Gore Street trades at a premium of 10.2pc to its most recent net asset value of 96.2p. We will tolerate this premium in view of the generous income and the dividend resilience we expect.
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PLUS1
