National Grid Transco’s NGG is poised to benefit from its systematic investment plans. This should further help in the enhancement of its infrastructure. Given its growth opportunities, NGG makes for a solid investment option in the utility sector.

Let’s focus on the factors that make this Zacks Rank #2 (Buy) company a strong investment pick at the moment.

NGG’s Growth Projections

The Zacks Consensus Estimate for fiscal 2025 earnings per share (EPS) has increased 2.4% to $4.63 in the past 90 days.

The Zacks Consensus Estimate for fiscal 2026 EPS has increased 1.5% to $4.87 in the past 90 days.

National Grid’s long-term (three to five years) earnings growth rate is 3.15%.

NGG’s Solvency

The time-to-interest earned ratio at the end of fiscal 2024 was 2.8. The ratio, being greater than one, reflects the company’s ability to meet future interest obligations without difficulties.

National Grid’s Dividend Yield

NGG has been consistently increasing shareholders’ value by paying dividends. The company's current dividend yield is 7.47%, better than the Zacks S&P 500 composite's 1.23%.

NGG’s Focus on Clean Energy

The company is enabling the energy transition for all and aims to reach net zero emissions by 2050. Its key greenhouse gas emission targets are to reduce absolute Scope 1 and Scope 2 emissions by 60% by 2030/31 from a 2018/19 baseline and reduce absolute Scope 3 greenhouse gas emissions from the same baseline by 37.5% within 2033/34.

National Grid is working with its partners to accelerate the development of a clean energy future. In the United States, NGG has made significant investments in large-scale renewable energy projects, including wind and solar.

NGG’s Systematic Investments

National Grid has plans to invest nearly $75 billion across its service territory in the United Kingdom and the United States over the next five years, with nearly half of the funding dedicated to U.S. energy system improvements in Massachusetts and New York.

Of this amount, nearly $35 billion represents an increase of more than 60% in the region’s investment in the past five years.

NGG’s Stock Price Performance

In the past three months, the stock has returned 8.9% compared with the industry’s growth of 8.2%.

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Other Stocks to Consider

A few other top-ranked stocks from the same industry are Evergy EVRG, PPL Corporation PPL and WEC Energy WEC, each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

EVRG’s long-term earnings growth rate is 5.85%. The Zacks Consensus Estimate for 2024 EPS implies an improvement of 8.5% from the bottom line recorded in 2023.

PPL’s long-term earnings growth rate is 6.82%. The company delivered an average earnings surprise of 6.8% in the past four quarters.

WEC’s long-term earnings growth rate is 7.98%. The company delivered an average earnings surprise of 4.7% in the trailing four quarters.

 

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