Is the National Grid share price expensive at 889p?
National Grid (LON:NG.) is an electricity and gas utility company focused on transmission and distribution activities in electricity and gas in both the United Kingdom and the United States.
Right now the National Grid share price is on the expensive side from a factor perspective, based on its Value Rank of 42. Let's see why this is.
A closer look at National Grid's Value Rank
We can see by using National Grid’s StockReport that the group has a:
- Rolling price to book value of 1.63,
- Trailing twelve month price to earnings ratio of 16.4
- Trailing twelve month price to free cashflow of 333
- Rolling dividend yield of 6.04%
- Trailing twelve-month price to sales ratio of 2.08
This combination of financial traits suggests that National Grid stock is toward the more expensive end of the market. Being expensive is not the end of the world, of course - but it does help to have favourable exposures to other factors to justify the share price premium.
What does this mean for potential investors?
Some of the best quality stocks in the market have defensible models that can deliver high levels of shareholder returns over the long term. But there are no guarantees and it's important to do your own research. Indeed, we've identified some areas of concern with National Grid that you can find out about here.
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