Is it time to pull the plug on National Grid?

Investors' favourite National Grid is on a collision course with the energy regulator over what it charges its customers. That could spell trouble for the attractive dividend. So is time to sell National Grid? Phil Oakley investigates.

Utility giant National Grid is seen as a classic defensive share: a low-risk business that can pay big dividends come rain or shine. So it's not difficult to see why it's popular with investors looking for income.

But can it keep paying bigger dividends in the future? On Monday, investors got a sharp reminder that even big, defensive utilities carry investment risks.

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Electricity Transmission Grid5.1%5.6%0.6%4.6%-1.0%
Gas Transmission Grid5.1%7.3%2.3%4.4%-2.9%
Gas Distribution Networks4.9%5.7%0.8%4.3%-1.4%
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Phil spent 13 years as an investment analyst for both stockbroking and fund management companies.

 

After graduating with a MSc in International Banking, Economics & Finance from Liverpool Business School in 1996, Phil went to work for BWD Rensburg, a Liverpool based investment manager. In 2001, he joined ABN AMRO as a transport analyst. After a brief spell as a food retail analyst, he spent five years with ABN's very successful UK Smaller Companies team where he covered engineering, transport and support services stocks.

 

In 2007, Phil joined Halbis Capital Management as a European equities analyst. He began writing for MoneyWeek in 2010.