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Strategies & Market Trends : Value Investing

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To: gcrispin who wrote (49511)	2/15/2018 7:12:34 AM
From: Spekulatius	Read Replies (3) of 78750

No much in this thread about NGG - the GB &US Grid and regulated utility operator. somewhat weak operating results and the increased interest rates have whacked this hard price to a 3 year low, currently yielding north of 5% dividend yield. I am inclined to buy here. PE is about 15x. while higher interest rates can pressure results in the short term, there are mechanisms in place for NGG to recover the cost (rate adjustments mechanisms), but they often work with a time lag. i figure base case return is dividend yield (~ 5.2% plus rate of inflation (regulated utility rate adjustment mechanisms) and no share price appreciation, which would be 7-7.5% annually - not bad but not great either. I do think that downside is limited, unless they screw up in a big way.

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