If you ask most people what the UK national grid is, they’ll probably say something about it being the electricity grid.
What they’ll have in mind is a network of pylons, cables, transformers and other such infrastructure which enables the transmission of power from power stations to homes and businesses around the country.
I think that’s a reasonable description and National Grid PLC is the company that owns and operates that infrastructure. If you also include the transmission and distribution of gas in that description, as well as a significant and similar business in the US, then you’ll have a fair summary of what National Grid PLC does.
As you might expect, building, maintaining and managing the electricity and gas network is a very defensive business. Booms and busts may come and go, but people still need to cook, heat their homes and boil their kettles. So it should come as no great surprise that the financial crisis had relatively little impact on the company or its progressive dividend.
That progressive dividend, combined with its recent near-5% dividend yield, is why I decided to take an in-depth look at National Grid.
What I found was a very unusual company operating as a state-appointed monopoly, and you can read my full review in the January issue of Master Investor magazine.