National Grid @ 604p, -22p (-3.51%) as at 11.30am
National Grid went ex dividend today and reacted with a predicable fall in the first half hour of trading but has clawed back a few pence. As things stand, the share price is showing a fall of 22p v. the dividend of 23.47p which, if it stayed the same, could be viewed as a small capital gain to a shareholder of 1.47p on top of the dividend returned (23.47 - 22 = 1.47).
All very simplistic and I know things don't necessarily work out that way (always other factors affecting the markets) but it is important to understand that the dividend, being a return of capital, comes straight off the share price so is not a capital loss to the investment.
The movement from the new "capital adjusted" share price of 601.53p, is the part that needs to be understood and compared to the market movement, newsflow, and sentiment of the day.
I often also find that when reporting major market moves at the end of the day some commentators will report such as National Grid as having fallen by 22p without explaining that the shares have gone ex dividend so it is something to be aware of. A fall of 22p as opposed to a fall of 1.47p makes better headlines!
In the short term, at around 625p and at a forecast 12.3 times earnings, I don't see too much more coming from National Grid with current earnings estimates in the current climate.
But, as we start to look beyond the current years performance, I am looking for another 10% gain in addition to the handsome forecast dividend of 6.3% (for the current year).
No comments:
Post a Comment