How National Grid plc (ADR) (NGG) Measures up as a GARP Investment

The company has displayed impressive operational performance improvements over the past 12 months across the majority of its businesses, and continues to invest heavily both in the U.K. and the U.S. to facilitate future growth — capital expenditure last year rose 8.5% to £3.7 billion, driving the value of its regulated assets on both sides of the Atlantic £2.7 billion higher to £35.1 billion.

National Grid plc (ADR) (NYSE:NGG) says that it expects to grow regulated asset value in the U.K. by 7% per year over the next five years, and a further 4%-5% in the U.S. Greater regulatory clarity at home through its eight-year accord with Ofgem has given the firm a strong base upon which to drive future growth, even if earnings are still likely to remain pressured in the near term.

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Although National Grid plc (ADR) (NYSE:NGG) fails the test as a strong earnings candidate at present, the firm’s generous dividend policy makes it an appetizing pick for those seeking decent investment income. The electricity play carries a forecast dividend yield of 5.4% for this year versus an average of 3.2% for the FTSE 100.

The article How National Grid Measures up as a GARP Investment originally appeared on Fool.com.

Fool contributor Royston Wild has no position in any stocks mentioned. The Motley Fool recommends National Grid (ADR).

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