Stock picked: National Grid
Total shares owned:
Dividend yield: 5.54%
Payout ratio: 130%
This weeks stock
This week the £5 investment got a little screwed. With the new Beta feature of trading212 I tried to invest directly into National Grid inside the Pie. It threw up an error and put the money as cash inside the pie, I was still able to use this money as I rebalanced the pie but that resulted the £5 being spread over all 10 stocks inside that portfolio.
What does National Grid do?
National Grid plc ticker NG.L is an energy company which transmits and distributes electricity and natural gas to its customers. It operates through 3 segments: UK Electricity transmission, UK Gas Transmission and US Regulated. The UK Electricity Transmission segment owns and operates electricity transmission networks, which are have about 7,212 kilometres of overhead lines, 2,239 kilometres of under ground cables and 347 substations throughout England and Wales, as well as Scottish electricity transmission systems.
Dividend Yield: 5.54%
Payout ratio: 130.68% (Yahoo finance)
Profit margin: 8.69%
Return on assets: 3.04%
Return on equity: 6.55%
P/E ratio (price to earnings): 24.69
Adjusted EPS: 55.2
EPS (Earning per share) Growth: -6%
National Grid is an interesting stock, it seems to me that NG is one of trading212 favourite stocks to give out as part of their free share scheme. It seems quite a diverse company as it has ties all over the UK but also the US.
This stock has a very nice yield of 5.54%, one which would be on the top end of what I look for and would consider a dividend income stock. We can see that the payout ratio is very high, it being over 100% is a concern but as with many stocks covid 19 has hit them hard.
With a profit margin of 8.69% its a little under what I like to look for (which is 10%) but still is not the worst. The P/E ratio is currently 24.69 which indicates to me that its slightly over fair value, but looking at the 5 year graph its very flat so I wouldn’t expect this stock to go up much in price. As with almost all company’s, with covid about the EPS growth is a negative which shows they are expected to have a reduced earning, but I believe this is inline with almost all companies so am not to bothered by this.
Looking at the cash to debt we see they carry a substantial amount more of debt than cash but this is a utility stock and is fairly normal within the industry.
On the news side, it's nice to see that National Grid is taking steps to be more aware of their surroundings and environment. They have recently been approved to remove overhead pylons in snowdonia and replace with 3km tunnel for the power cables. - News link here.
This stock is currently around the 52 week average and most analysts consider this stock a hold or under perform. I would have to agree with the hold on this stock, though it is great for income it just doesn’t cut it compared to other stocks on offer in the market.
This week we received 1 dividend this week totalling £0.53
AGNC @ £0.11
GSK @ £0.18
MDLZ @ £0.02
FRT @ £0.07
MAIN @ £0.07
O @ £0.08
Total dividend (Month): £2.03
Total dividend (6 month): £0.67
Amount for charity (6 month): £0.17
General account summary
The last few weeks have been a roller coaster for this portfolio and we are still holding onto gains, currently at the time of writing this blog we are up £2.95 (0.77%). We also received 6 dividends which has been amazing. When the pies start receiving dividends from the stocks within, it would be great to see how these pies reinvest those dividends. Still finding features and quirks with the pie feature but they in my opinion are a great feature to come to the main app. It’s great that we are into the first month of the second half of the year and we have got £0.17 already in the pot ready for the next donation. Only up from here.