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Nomura Securities Maintains a 'Buy/Top Pick' on National Grid (NGG); Low Beta, High Growth

August 24, 2012 8:34 AM EDT Send to a Friend
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Price: $72.44 -0.44%

Rating Summary:
    4 Buy, 4 Hold, 1 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 13 | Down: 24 | New: 21
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Nomura Securities maintains a 'Buy' on National Grid (NYSE: NGG).

Analyst, Jonathan Constable, said, "A key driver for National Grid’s stock price performance in recent months has been the macro environment – very low real yield. In the report, we provide an update on National Grid’s key businesses. In the UK, the RIIO regulatory review dominates concerns, while in the US, the focus remains on cost cutting and the rate cases in Rhode Island and upstate New York. We expect National Grid to adopt a low growth dividend policy to 2021 and continue with its scrip dividend policy – and that NG can meet its key credit metrics this way. If it wants more headroom, NG has the option to sell one or more of its GDNs. On valuation, the stock is not expensive in the context of comparable investments, trading at 12.8x 2014E P/E, versus around 15x for global peers, and would trade at 13.5x at our new 735p price target (increased from 730p). It remains one of our top Buy picks in European utilities."

For an analyst ratings summary and ratings history on National Grid click here. For more ratings news on National Grid click here.

Shares of National Grid closed at $54.45 yesterday.




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