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NGG, NATIONAL GRID PLC
Revenue is led by New York (38%) and New England (25%), with 4 more segments behind.
The business
What it sells, where the money comes from, the kind of company it is.
The business in brief
read the 10-K →What this business is and what moves its needle, from its own SEC filings.
- What it is
- A regulated utility, earning a set return on the capital it sinks into its network.
- Situation
- Capital build-out. Capital spending has surged to 53% of sales, today's earnings are charged less depreciation than tomorrow's will be.
- What moves the needle
- Operating margin has run about 23% through the cycle, a solid margin the cost base and competition set as much as the price does. Capital spending runs about 28% of sales, well above depreciation, so the return earned on what it sinks into that plant weighs as much as the margin. Read this kind of business on rate base and the allowed return. On its own account, the filing leans hardest on debt terms & refinancing, set against the numbers in what the filing emphasizes, below.
- Is it a good business?
- Return on capital has rarely cleared the cost of capital (median 5%, above 15% in 0 of 9 years). By owner earnings: roughly 20% of revenue reaches owners as cash, consistently. Modest returns here are the design, not a verdict: a regulated utility's prices are set by commission, so the questions are the return the regulator allows, how fast the invested base it earns that return on is growing, and the health of the relationship with the commissions that decide both — all of which live in the 10-K, not the multiple.
Every line is arithmetic on the company's filings, shown in full in the sections below.
Where the money comes from
read the 20-F →Revenue spreads across 7 segments, the largest New York at 38%.
- New York38%£6.7B
- New England25%£4.3B
- UK Electricity Transmission14%£2.5B
- UK Electricity Distribution14%£2.4B
- National Grid Ventures8%£1.4B
- UK Electricity System Operator6%£1.0B
- Other1%£116M
From the segment footnote of the company's own 20-F. Shares are of total revenue; the profit bar shows each segment's share of segment operating profit, before unallocated corporate costs.
The record
Ten years of arithmetic, read across the cycle.
The record, 2016–2025
realized figures from each filing · older years to the left| 2016’16 | 2017’17 | 2018’18 | 2019’19 | 2020’20 | 2021’21 | 2022’22 | 2023’23 | 2024’24 | 2025’25 | TTMTTMSep 2025 | |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Income statement | |||||||||||
| £13.2B | £15.0B | £15.3B | £14.9B | £13.4B | £13.7B | £18.4B | £21.7B | £19.9B | £18.4B | £17.5B | RevenueRevenue |
| £3.2B | £3.2B | £3.5B | £2.9B | £2.3B | £2.4B | £4.4B | £4.9B | £4.5B | £4.9B | £5.2B | Operating incomeOp. inc. |
| 24.4% | 21.3% | 22.9% | 19.2% | 17.1% | 17.6% | 23.7% | 22.5% | 22.5% | 26.8% | 29.5% | Operating marginOp. mgn |
| £2.6B | £7.8B | £3.5B | £1.5B | £1.3B | £1.6B | £2.4B | £7.8B | £2.3B | £2.9B | £2.9B | Net incomeNet inc. |
| 14% | 5% | — | 18% | 23% | 18% | 35% | 10% | 27% | 22% | 24% | Effective tax rateTax rate |
| Cash flow & returns | |||||||||||
| £4.3B | £4.3B | £4.7B | £4.4B | £4.1B | £3.9B | £5.5B | £6.3B | £6.9B | £6.8B | £7.8B | Operating cash flowOp. cash |
| £1.3B | £1.5B | £1.5B | £1.7B | £1.4B | £1.5B | £1.8B | £2.0B | £2.1B | £2.2B | £1.6B | DepreciationDeprec. |
| £390M | (£5.0B) | (£370M) | £1.1B | £1.4B | £751M | £1.3B | (£3.4B) | £2.6B | £1.7B | £3.4B | Working capital & otherWC & other |
| £2.9B | £3.3B | £3.7B | £3.6B | £4.3B | £4.2B | £5.1B | £6.3B | £6.9B | £8.8B | £9.2B | CapexCapex |
| 21.6% | 21.9% | 24.5% | 24.3% | 32.1% | 30.8% | 27.6% | 29.2% | 34.8% | 47.8% | 52.8% | Capex / revenueCapex/rev |
| £3.0B | £2.8B | £3.2B | £2.7B | £2.7B | £2.4B | £3.7B | £4.4B | £4.9B | £4.6B | £6.3B | Owner earningsOwner earn. |
| 22.6% | 18.9% | 20.9% | 17.8% | 20.3% | 17.5% | 19.8% | 20.1% | 24.6% | 25.2% | 35.8% | Owner earnings marginOE mgn |
| £1.4B | £1.0B | £972M | £754M | (£143M) | (£333M) | £392M | £18M | £35M | (£2.0B) | (£1.4B) | Free cash flowFCF |
| 10.9% | 6.8% | 6.4% | 5.0% | −1.1% | −2.4% | 2.1% | 0.1% | 0.2% | −10.7% | −8.1% | Free cash flow marginFCF mgn |
| £1.3B | £1.5B | £4.5B | £1.2B | £892M | £1.4B | £922M | £1.6B | £1.7B | £1.5B | £1.6B | Dividends paidDiv. paid |
| £267M | £189M | £1.0B | £0 | £0 | — | — | — | — | — | — | BuybacksBuybacks |
| — | 7% | 9% | 5% | 4% | 4% | 5% | 6% | 5% | 5% | 5% | ROICROIC |
| 19% | 38% | 19% | 8% | 6% | 8% | 10% | 26% | 8% | 8% | 8% | Return on equityROE |
| 9% | 31% | −5% | 2% | 2% | 1% | 6% | 21% | 2% | 4% | 3% | Retained to equityRetained/eq |
| Balance sheet | |||||||||||
| £3.1B | £9.9B | £3.0B | £2.2B | £2.1B | £2.5B | £3.3B | £2.8B | £4.3B | £6.9B | £4.1B | Cash & investmentsCash+inv |
| — | £2.7B | £2.8B | £3.2B | £3.0B | £2.9B | £3.7B | £3.8B | £3.4B | £4.1B | £2.8B | ReceivablesReceiv. |
| — | £403M | £341M | £370M | £549M | £439M | £511M | £876M | £828M | £557M | £641M | InventoryInvent. |
| — | £3.3B | £3.5B | £3.8B | £3.6B | £3.5B | £4.9B | £5.1B | £4.1B | £4.5B | £4.3B | Accounts payablePayables |
| — | (£214M) | (£314M) | (£246M) | (£67M) | (£159M) | (£689M) | (£362M) | £167M | £177M | (£793M) | Operating working capitalOper. WC |
| — | £13.6B | £6.7B | £7.9B | £5.8B | £9.9B | £18.0B | £9.1B | £10.4B | £14.3B | £8.9B | Current assetsCur. assets |
| — | £10.5B | £8.7B | £9.1B | £8.6B | £9.4B | £24.8B | £9.1B | £11.4B | £10.6B | £9.2B | Current liabilitiesCur. liab. |
| — | 1.3× | 0.8× | 0.9× | 0.7× | 1.1× | 0.7× | 1.0× | 0.9× | 1.3× | 1.0× | Current ratioCurr. ratio |
| — | £39.8B | £40.7B | £44.9B | £49.8B | £47.0B | £57.5B | £64.4B | — | — | £67.4B | Net PP&ENet PP&E |
| — | £6.1B | £5.0B | £5.4B | £5.7B | £4.6B | £9.5B | £9.8B | £9.7B | £9.5B | £9.3B | GoodwillGoodwill |
| — | £65.8B | £59.2B | £63.4B | £67.6B | £67.2B | £94.9B | £92.7B | £98.3B | £106.7B | £103.8B | Total assetsAssets |
| — | £23.1B | £22.2B | £24.3B | £26.7B | £27.5B | £33.3B | £40.0B | £42.2B | £42.9B | £42.3B | Total debtDebt |
| — | £13.3B | £19.2B | £22.0B | £24.7B | £25.0B | £30.0B | £37.3B | £38.0B | £35.9B | £38.2B | Net debt / (cash)Net debt |
| 3.3× | 2.8× | 3.5× | 2.5× | 2.2× | 2.8× | 4.1× | 3.1× | 2.6× | 2.7× | 2.8× | Interest coverageInt. cov. |
| £13.6B | £20.4B | £19.0B | £19.5B | £19.8B | £19.8B | £23.8B | £29.5B | £29.9B | £37.8B | £37.2B | Shareholders’ equityEquity |
| Per share | |||||||||||
| 3.77B | 3.76B | 3.46B | 3.39B | 3.46B | 3.52B | 3.60B | 3.96B | 3.99B | 4.71B | 4.93B | Shares out (diluted)Shares |
| £3.50 | £4.00 | £4.41 | £4.41 | £3.86 | £3.88 | £5.13 | £5.47 | £4.97 | £3.90 | £3.55 | Revenue / shareRev/sh |
| £0.69 | £2.07 | £1.03 | £0.45 | £0.37 | £0.47 | £0.65 | £1.97 | £0.57 | £0.62 | £0.58 | EPS (diluted)EPS |
| £0.79 | £0.75 | £0.92 | £0.78 | £0.78 | £0.68 | £1.02 | £1.10 | £1.22 | £0.98 | £1.27 | Owner earnings / shareOE/sh |
| £0.38 | £0.27 | £0.28 | £0.22 | £-0.04 | £-0.09 | £0.11 | £0.00 | £0.01 | £-0.42 | £-0.29 | Free cash flow / shareFCF/sh |
| £0.35 | £0.39 | £1.30 | £0.34 | £0.26 | £0.40 | £0.26 | £0.41 | £0.43 | £0.32 | £0.33 | Dividends / shareDiv/sh |
| £0.76 | £0.88 | £1.08 | £1.07 | £1.24 | £1.19 | £1.42 | £1.60 | £1.73 | £1.87 | £1.88 | Cap. spending / shareCapex/sh |
| £3.59 | £5.41 | £5.49 | £5.77 | £5.71 | £5.63 | £6.62 | £7.47 | £7.48 | £8.03 | £7.55 | Book value / shareBVPS |
| 9-yr | 5-yr | |
|---|---|---|
| Revenue / share | +1.2%/yr | +0.2%/yr |
| Owner earnings / share | +2.5%/yr | +4.7%/yr |
| EPS | −1.2%/yr | +11.0%/yr |
| Dividends / share | −1.0%/yr | +4.7%/yr |
| Capital spending / share | +10.5%/yr | +8.5%/yr |
| Book value / share | +9.3%/yr | +7.1%/yr |
Where the cash went
ReinvestBuybacksDividendsAcquisitionsRetainedEach year's operating cash, by what management did with it: the mix, and how it drifts.
Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.
In fiscal 2025 the business earned £4.6B of owner earnings, the operating cash left after the £2.2B it takes just to hold its position. It put £6.6B more into growth; free cash flow, after that spending, was (£2.0B).
| FY2025 | FY2024 | FY2023 | FY2022 | FY2021 | |
|---|---|---|---|---|---|
| Reported net income | £2.9B | £2.3B | £7.8B | £2.4B | £1.6B |
| Depreciation & amortizationnon-cash charge added back | +£2.2B | +£2.1B | +£2.0B | +£1.8B | +£1.5B |
| Working capital & othertiming of cash in and out, other non-cash items | +£1.7B | +£2.6B | −£3.4B | +£1.3B | +£751M |
| Cash from operations | £6.8B | £6.9B | £6.3B | £5.5B | £3.9B |
| Maintenance capital expenditurethe spending needed just to hold position and volume | −£2.2B | −£2.1B | −£2.0B | −£1.8B | −£1.5B |
| Owner earnings | £4.6B | £4.9B | £4.4B | £3.7B | £2.4B |
| Growth capital expenditurediscretionary; spent to get bigger, not to stand still | −£6.6B | −£4.8B | −£4.3B | −£3.3B | −£2.7B |
| Free cash flow | (£2.0B) | £35M | £18M | £392M | (£333M) |
| Owner-earnings marginowner earnings ÷ revenue | 25% | 25% | 20% | 20% | 17% |
Owner earnings is the cash an owner could pull out without starving the business: operating cash less the maintenance capital it must spend to hold its position (here about £2.2B, roughly its depreciation, the rate its assets wear out). The other £6.6B of its capital spending is growth it chose, not upkeep it owed; charged only with the maintenance it must do, the business earns well more than the year's free cash flow shows.
Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.
Quality & stewardship
Returns, the balance sheet, capital allocation, and pay.
Owner’s Scorecard
Will it survive?
- AdequateOperating income £5.2B ÷ interest expense £1.8B
What this means
Comfortable in a normal year, but below the margin of safety Graham looked for. Worth checking how stable the coverage has been across a full cycle.
- How heavy is the debt, net of cash? £38.2B · 7.4× operating profitHeavy net debtCash £887M + ST investments £3.2B − debt £42.3B
What this means
Netting £4.1B of cash and short-term investments against £42.3B of debt leaves £38.2B owed, about 7.4× a year's operating profit (8.2× on the gross debt, before the cash). Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
- Not enough data
What this means
The filing data didn't include the inputs for this check.
Is it a good business?
- Below average through the cycle9-yr median, range 4%–9%; 5% latest = NOPAT £3.9B ÷ invested capital £78.6BIndustry peers: median 4%
What this means
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. The headline is the median of the last 9 years (it ran 5% most recently), so one peak or trough year doesn't set the verdict. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
- High through the cycle10-yr median margin, range 17%–25%; latest £6.3B = operating cash £7.8B − maintenance capex £1.6BIndustry peers: median -1%
What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's 36% of revenue this year, a 20% median across 10 years. It chose to put £7.7B more into growth, so free cash flow this year was (£1.4B) — the gap is investment, not weakness.
- Cash-backedCash from ops £7.8B ÷ net income £2.9B
What this means
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.
How is the cash used?
- Reinvests most of itDividends + buybacks £1.6B ÷ Owner Earnings £6.3B — this fiscal year
What this means
Of £6.3B Owner Earnings, £1.6B (26%) went back to shareholders, £1.6B dividends, £0 buybacks. Returning most of it is the mark of a mature business with little left to reinvest at a high return; reinvesting most could mean a long runway, or empire-building. The split doesn't say which; the return earned on it (see ROIC) does. This year's proportion is 26%; across the record (2016–2025) it is 52%, the capital-allocation section below.
- Investing or harvesting? 5.93×ExpandingCapex £9.2B ÷ depreciation £1.6B
What this means
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.
Graham’s defensive tests · 3 of 4 met
Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.
- Adequate size —Revenue ≥ $2B (a dollar floor) · £17.5B
What this means
Big enough to weather a storm. Graham's floor is a dollar figure — about $2B of revenue as a conservative modern stand-in. This company reports in its home currency and we carry no exchange rate, so we show the figure and leave the size bar for you to apply rather than convert it with a number we don't have.
- Strong liquidity —Current ratio ≥ 2× (waived for utilities) · exempt
What this means
Graham exempted public utilities from this test: their working capital “takes care of itself” through the continuous bond-and-share financing of growth, so a thin current ratio is the industry's structure, not a warning. His substitute test — debt no more than twice book equity — is the next line.
- Conservative debt PassDebt ≤ 2× equity (Graham's utility test) · £42.3B vs £37.2B equity
What this means
Graham's own substitution for public utilities: debt not exceeding twice the stock equity at book value, in place of the working-capital tests an industrial faces. A utility finances its plant with bonds by design; the question is whether the borrowing stays inside the equity behind it.
- Earnings stability PassA profit every year (10-yr record) · no losses
What this means
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
- Dividend record PassUninterrupted dividends · paid every year (10)
What this means
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
- Earnings growth MissEarnings +33% over the record · −7%
What this means
At least a third more earnings than a decade ago, averaging three years at each end. Net income (not per-share), so stock splits don't distort it, buybacks and dilution show up in the share-count line instead.
- Moderate price —P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price
What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are £0.83/share (latest year £0.55), the averaged base the calculator's gate runs on, and book value is £7.15/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.
Durability & moat, 2016–2025
Whether the record’s returns held, and what the capital reinvested earned.
- Profitable years 10 of 10
What this means
Never lost money over the record, the earnings stability Graham insisted on.
- Return on capital ≥ 15% 0 of 9 yrs
What this means
A moat shows up as a high return on invested capital that holds year after year, not one good vintage.
- Operating margin 23% → 24% (3-yr avg ends)
What this means
Through the cycle the operating margin held roughly steady — about 23% early, 24% lately, median 23%.
- Reinvestment, incremental ROIC 2%
What this means
Reinvested capital came back at only a modest incremental return — near the cost of capital, where extra growth adds little per dollar. The record shows whether it is a soft stretch or a thinning moat.
- Owner earnings growth +6%/yr
What this means
Owner earnings grew about 6% a year over the record.
- Worst year 2020 · 17.1% op. margin
What this means
Stayed profitable even in its hardest year, the resilience that survives recessions.
- Share count +2.5%/yr
What this means
The share count is rising, dilution works against you on a per-share basis.
- Dividend record rising
What this means
Paid and raised the dividend across the record, the continuity Graham prized.
All figures as filed; the source filing is linked above.
Current Position
as of fiscal year-end, Sep 30, 2025Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.
- Cash & short-term investments£4.1B
- Receivables£2.8B
- Inventory£641M
- Other current assets£1.4B
- Accounts payable£4.3B
- Other current liabilities£4.9B
From the company's latest filing.
How the cash was used, 2016–2025
Over the record, the business generated £51.3B of operating cash; how management split it reads as a reinvestor, most operating cash is plowed back into the business.
- Reinvested£49.1B · 96%
- Dividends£16.5B · 32%
- Buybacks£1.5B · 3%
- Returned to owners£18.0B
52% of the owner earnings the business produced over the span, £16.5B as dividends and £1.5B as buybacks.
- Source of funding−£15.8B
Reinvestment and shareholder returns ran £15.8B beyond the operating cash the business generated, so the gap was financed off the balance sheet.
- Average price paid for buybacks—
Buybacks ran £1.5B over the span, but the filings don't tag the share count needed to deduce the average price paid.
- Net change in share count30.5%
The diluted count rose from 3774M to 4926M: issuance (stock pay, deals) outran any buybacks, so owners were diluted on net.
- Dividend record£0.32/sh
Paid in 10 of the years on record, the per-share dividend shrinking about 1% a year. It was cut at least once along the way.
- Return on what it retained10%
Of the earnings it kept rather than paid out (£15.7B over the span), annual owner earnings (first three years vs last three) grew £1.6B, so each retained £1 added about 0.10 of yearly owner earnings. Buffett's test, run on owner earnings instead of market value.
Buybacks are gross of stock issued to staff; the share-count line above is the net of that, the figure that decides whether owners gained. The average price paid blends a year of purchases (and any accelerated repurchase), so it is close, not exact. The record of where the cash went and on what terms.
Peers, Multi-Utilities
The same industry, side by side on owner economics. Each column names the period it is read over; the group median at the foot is the line to read each figure against.
| Company | Revenuelatest FY, USD | Gross marginmedian over the record | Op. marginmedian over the record | ROICmedian over the record | Owner earn. marginmedian over the record |
|---|---|---|---|---|---|
| NGNational Grid plc | $24.0B | — | 22.5% | 4% | -1% |
| NGGNATIONAL GRID PLC | $23.8B | — | 22.5% | 5% | 20% |
| GNEGenie Energy Ltd. | $502M | 30% | 5.8% | 29% | 7% |
| VIVOVivoPower PLC | $61K | 16% | -20.9% | -15% | -16% |
| Group median | — | — | 14.2% | 5% | 3% |
The price
What a price has to assume.
What the price implies
reverse-DCFEnter the US price, in dollars: the NYSE/Nasdaq quote you hold. Per the filing's own cover, “American Depositary Shares (ADSs) and each ADS represents five ordinary”; NATIONAL GRID PLC reports in GBP, so every figure in this tool is stated per ADS and translated at GBP 1 = $1.359 (2026-08-20, reference rate) so your dollar quote reconciles exactly. The record tables elsewhere on this page remain as filed, in GBP.
Type today's close and see the owner-earnings growth you'd have to believe to justify it, beside what NATIONAL GRID PLC has delivered.
NATIONAL GRID PLC’s latest year shows negative owner earnings, the mark of a build-out: total capital spending outruns the cash the business throws off today. So the tool opens on the steady-state base (maintenance capex in place of the build-out spend), the cash it would earn at rest; clear the toggle below to read the latest year exactly as reported.
Through the cycle, NATIONAL GRID PLC earns about $4.8B on its 20.2% median owner-earnings margin. This year’s 35.8% margin runs above that; the reported figure may flatter a peak you'd be paying on. Normalize, below, values the price on that through-cycle figure rather than the latest year. It comes pre-checked here for that reason, the same rule that already normalizes a trough; clear it to price the year as filed.
—
9.0% = the 4.71% 10-year Treasury (Aug 18, 2026) + 4.29 points of equity premium. The rate you require is yours to set.
Enter a price above to run it.
A dated snapshot of the price you typed, the assumptions you set, and what the page showed for them. A snapshot is never edited after it is saved. Your notebook is yours alone — the commitment states what is stored and what we will never do.
Graham capped the multiple at 15×; Buffett and Munger let that rule go: a wonderful business can deserve 50× if the thesis holds. The gate marks the bargain-hunter's floor.
Prefilled with the 10-year Treasury (4.71%, as of Aug 18, 2026). Edit it for today’s exact figure, or a AAA corporate yield.
Graham measured a stock against the bond you could own instead, the heart of his margin of safety. Enter a price above to weigh the owner-earnings yield against this bond.
Free cash flow ($1.9B) on 1040M shares outstanding, per the 20-F cover, as of 2026-03-31; net debt $52.0B. The base opens on the through-cycle figure (the latest year sits above the record’s own median, and Graham’s averaging cuts both ways); clear Normalize to use the year as filed. Net of stock comp treats option pay as the expense it is. Capex ($12.6B) runs well above depreciation ($2.1B), so this is a build-out; Steady-state swaps total capex for maintenance (≈ depreciation), lifting the base to about $8.5B, the cash it would throw off if it stopped expanding. The dials set the multiple a growth belief justifies; the price, and every dollar on this page, is yours.
Manual order: ← NFGC its page in the Manual NICE →
Industry order: ← MGEE the Multi-Utilities chapter NI →