In August National Grid was my biggest dividend payer so I selected this company for the first Dividend Spotlight I publish
National Grid is operating electricity and gas networks mainly located in the UK and USA. National Grid. As system operator with regulated prices National Grid is having a nice and steady cashflow.
It’s often that utilities are regulated companies. Due to utilities often having some kind of local monopoly by being the ownly one owning a distribution network for gas or electricity, it’s common that authorities regulate the pricing these kind of companies are allowed to set.
The dividend payment frequency of National Grid is 2 times per year. 70% of their yearly dividend is paid in August. This is probably why National Grid is my biggest payer in August.
I received 2 dividend payments from National Grid this year of in total €85,70. National Grid is at the moment 1,7% of my portfolio and responsible for 1,8% of my dividend income.
Current yield of National Grid is 5,73%.
As a regulated utility the dividend of National Grid is increasing slowly, but steady. The graph below is showing the dividend history of National Grid in last few years:
The compounded anual growth rate since 2016 is 4,37%, but last 5 years the CAGR is 2,37%.
I expect an average dividend growth in the next 5 years between 2.5% – 3,0%. It’s not the biggest dividend growth in my portfolio, but it will result in a nice cashflow to reinvest.
During the 2017/2018 full year results publication National Grid announced a 4,6% increase of their final dividend over the bookyear 2017/2018. The final dividend will increaes from 29,1 pence to 30,44 pence.
I own 100 shares National Grid so this final dividend increase will result in 134 pence extra dividend. In euro’s this is €1,53.