National Grid shares hit a two-year high recently, but no sooner had they done so than the price suffered an outage as investors began to speculate on just how safe that high-yielding dividend of the Grid’s really is.
The company, which not only runs the electricity-transmission wires between the nation’s pylons but is also in charge of half the country’s mains gas networks, has for the past few years been increasing its shareholder payouts at a rate of 8 per cent per annum. That pace of increase has meant the FTSE 100-listed shares yielding well into the high single digits.
Yield like this are often a sign of something awry, and for such a dull business with such apparently rock-solid returns, the Grid has indeed