Will the National Grid share price rise faster than Centrica, SSE and Severn Trent shares after results?

Does National Grid plc (LON:NG) (NG.L) have more total return potential than Centrica PLC (LON:CNA) (CNA.L), SSE PLC (LON:SSE) (SSE.L) and Severn Trent Plc (LON:SVT) (SVT.L)?

National Grid plc
National Grid plc

The National Grid plc (LON:NG) (NG.L) share price is flat today after the release of full year results to the stock market. The company seems to have made progress with its strategy in the year to 31 March 2017.

It has been able to generate £460 million of savings for customers in the first half of the RIIO framework. It has also invested a record £4.5 billion in capex in the 2017 financial year.

National Grid has completed the sale of 61% of its UK Gas Distribution business, with a £4 billion return to shareholders already announced. It has received a good outcome in the rate filings in the US for the downstate New York gas and Massachusetts Electric businesses. Its results also state it has received a positive conclusion to the RIIO mid-period regulatory review in the UK.

National Grid’s dividends per share for the full year are 44.27p. This puts it on a dividend yield of 4.1%, which is in line with other utility sector peers such as Centrica PLC (LON:CNA) (CNA.L), SSE PLC (LON:SSE) (SSE.L) and Severn Trent Plc (LON:SVT) (SVT.L). For example, Centrica yields 6.1%, SSE has a yield of 6.2% and Severn Trent yields 3.4%.

In my opinion, the 2017 financial year was a positive one for National Grid. It is making steady progress and I believe this could lead to gradually improving financial performance over the long run.

I believe National Grid could become a more popular stock over the medium term. I think the National Grid share price may benefit from its status as a relatively defensive stock at a time when political risks in the US and Europe continue to be present. Therefore, while I’m optimistic about the outlooks for SSE, Centrica and Severn Trent, I think the National Grid share price could perform relatively well.

About Robert Stephens 3395 Articles
Robert Stephens is a CFA Charterholder and an Equity Analyst by trade. He is a passionate private investor who has been buying and selling shares for many years, owning a wide range of UK shares in the process. He has written for Citywire and The Motley Fool US and now runs his own business. To contact Robert, please email info@investomania.co.uk or use one of the other contact methods available on the 'Contact Us' page