National Grid Share Discussion Threads

[pander45] 27/5/2024 09:29

It might not take years, or it might. A company like this has to evolve otherwise it becomes a static entity for shareholders. They could have piled on the debt but that is equally treacherous and impactful.

[bountyhunter] 27/5/2024 09:22

As an income investor if you take up the rights you may then receive close to the same total dividend income as previously from your NG holding.
However it will have cost you 645p on a 7 for 24 basis (for shares which will not receive the final dividend) just to maintain the status quo, not a good deal however you look at it. Furthermore as previously discussed the capital value of original shares has dropped by significantly more than would be accounted for by the rights issue. Unfortunately however you look at this it's been a disaster for shareholders. Future growth may mitigate but that's yet to be seen and will take many years if not decades.

[pander45] 27/5/2024 09:16

There are, but one way not to look at it is to assume that there will not be significant growth is the value of the company in the future. I personally see this much more as an opportunity rather than a threat. I only invest what I can afford to sit on for however long I need to. This facilitates me with the most important aspect of investment. Patience.

[laurence llewelyn binliner] 27/5/2024 08:39

#Viscount1, thank for adding, I was not aware of that choice, mine will be staying inside the ISA, tax free dividends and CG are the best rewards.. :o)

[viscount1] 27/5/2024 08:37

You can take up the rights outside of an ISA even if the NG position is in an ISA.

[laurence llewelyn binliner] 27/5/2024 08:34

Each holders situation is different, but where possible the best way to recover the position (IMO) is to add the discounted rights at 645 pence and if you can add again to double your holding post XD to reduce your overall average price..

Holders inside an ISA have the problem of funding that strategy, which will could mean selling something to raise the capital before 06.06.2024 for the option, then funding the rest needed which is a PITA..

[bountyhunter] 27/5/2024 08:21

We are not all in the same position. There are many ways of looking at this.

[goldgeezer] 27/5/2024 07:25

Absolutely spot on. Also, ones holding is only diluted if the discounted options are not taken.

[albajack] 27/5/2024 00:21

@bountyhunter, what you said in #9151 was:

"Another way of attributing a value would be to multiply £11.26 (Wed close) by the rebased dividend per share divided by the current dividend per share, I've not tried that one but it may come out close to the figure we have posted, leaving the future yield roughly the same due to a lower share price?"

And the answer to that question was that you are calculating a future lower share price (x) by dividing the future dividend (y) by the current percentage yield (z). So if you then divide the future dividend (y) by the resultant future lower share price (x), the answer you get is (z), i.e. the current percentage yield. Not roughly the same, but exactly the same.

x = y / z

=> z = y / x

You say you haven't tried it; give it a go.

If you are wanting to calculate the prevailing yield at some point in the future based upon a prevailing share price and expected dividend, and then compare to previous data in order to ascertain value and/or re-entry points, that is something different to your question.


The advantage for those of us who have not sold is that there is no need to try to time a way back in. And by taking up rights in full we suffer no cut in total dividend received.

A 645p per fully-paid rights and an adjusted future dividend of 45.3p is a 7% yield on the purchase. No transaction charges, no stamp duty. These two will also lower any re-entry price calculations, especially the latter.


Oh, and I am an income investor, both now an in the future...!

[pander45] 27/5/2024 00:06

Lots of panic here, I don't see the reason. Yes, it is not an ideal way of raising funds and I am not a fan of dilution but, wise investment by the board will increase the profitability of the company and the share price will follow. It is bad news for short term traders but surely good news for long term investors. Can anyone seriously see this being below 12 quid in 3-4 years time? I can't. So I will be taking up the rights and buying more as close to the trough after ex dividend as possible. For me it is just a no brainer.

[gateside] 26/5/2024 23:11

The US markets are closed on Monday for Memorial Day

[bountyhunter] 26/5/2024 20:52

"calculating the future yield from future price and dividend will just return the original yield"

That is the point. For you it may be hypothetical but some others will have sold like myself, and it's relevant for future income investors in the shares.

[bountyhunter] 26/5/2024 18:37

58.52p total divi for 23/24
checking for the rebased value

"...a total DPS of 58.52p/share for 2023/24 which will then be rebased given the increased number of shares following the Rights Issue."

So the dividend per share will decline by 24/31 due to the dilution. For the same dividend return as at the Wed close for purchasers of the shares ex rights the share price would need to be 1126p*24/31 = 871p, not far off the share price now.

For me personally if I could buy back at 1025p * 24/31 = 793.5p then my dividend payment would be unscathed! :) ..as I sold at a 1025p average on Thursday. I'm not expecting the price to drop back that far but who knows. If I did that before the 6 June of course I would get the unrebased final dividend (although just for 23/24) on more shares, so 793.5p is too low as I haven't allowed for potentially buying back a few more shares (on which the unrebased final dividend would be paid) at the lower price. I give up, I didn't do advanced maths!

[bountyhunter] 26/5/2024 18:30

852p, that's pretty close to my valuation of 856p which I made in post 8934 on Thursday :)

Another way of attributing a value would be to multiply £11.26 (Wed close) by the rebased dividend per share divided by the current dividend per share, I've not tried that one but it may come out close to the figure we have posted, leaving the future yield roughly the same due to a lower share price?

[natasonline] 26/5/2024 15:38

Someone mentioned the other day about short selling prior to the announcement, do you have a link?

[gilesy911] 26/5/2024 15:36

Thank you Viscount1

[viscount1] 26/5/2024 15:24

Assuming you mean new NGPN shares you can:

1. Sell them in the market.

2. Participate in the rights issue via your broker. You will need 645p cash for each new share you buy.

3. Let them lapse and take a cash out when they are sold on your behalf.

You can also mix and match the above.

[gilesy911] 26/5/2024 15:20

Hi Never had a rights issue before. I've noticed 2916 shares in my broker account. What happens next ??Thanks in advance

[utyinv] 26/5/2024 15:18

Hi all,

I did a few calcs last night before travelling.

Total value of holding on Fri 17th May (closing price £11.39 x old holding) will require an eventual price of £10.27 to break even as we were as of Friday 17th May.

However, as the shares go ex divi on 6th June you cannot really say whether you have broke even or not until say for example next May when hype is inflated due to the imminent dividend.

[bountyhunter] 26/5/2024 15:09

I'm not sure about a bonus, it could be described as the only good point, imho :)
And all this before Starmer even gets in and him and his chancellor do whatever to support "Great British Energy".

[viscount1] 26/5/2024 15:05

24/5 is a date. The NGPN price on that date closing:

1 NGPN =~ 889 - 645 - 39
= 205

[berny3] 26/5/2024 15:05

BH - exactly my point the drop in price in the time is overdone imo. As stated I took up my rights as I see the investment plan as sound and I bought more shares ex rights just over £9

The new shares I bought yield 4.3% on next dividend alone and thereafter annually 5% based on this year dividend rebased for rights issue, which will be compounded by 6-8% per year based on the announcement. that's a bonus on top of continuing to invest in the company for the longer term.