National Grid (NG.) said its dividend will rise at least in line with the rate of retail price inflation (RPI) each year for the foreseeable future. Investors breathed a sigh of relief on the announcement as there were fears that finances were being squeezed under a tough new settlement from regulator Ofgem. The shares rose by 27p, or 3.5 per cent, to 778p and now offer a forecast dividend yield of 5.2 per cent.
IC TIP:
Buy
at
778p
National Grid added that the year was finishing well and that earnings forecasts will be modestly ahead of previous guidance. Analysts at Deutsche Bank expect adjusted pre-tax profits of £2.71bn, giving EPS of 52.9p (from £2.58bn and 51p in 2012).
