Intrinsic value of National Grid ADR - NGG

Previous Close

$53.64

  Intrinsic Value

$853.32

stock screener

  Rating & Target

str. buy

+999%

Previous close

$53.64

 
Intrinsic value

$853.32

 
Up/down potential

+999%

 
Rating

str. buy

We calculate the intrinsic value of NGG stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 4.1

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  11.70
  11.03
  10.43
  9.88
  9.40
  8.96
  8.56
  8.20
  7.88
  7.60
  7.34
  7.10
  6.89
  6.70
  6.53
  6.38
  6.24
  6.12
  6.01
  5.91
  5.81
  5.73
  5.66
  5.59
  5.53
  5.48
  5.43
  5.39
  5.35
  5.32
Revenue, $m
  23,423
  26,006
  28,718
  31,556
  34,521
  37,613
  40,833
  44,183
  47,667
  51,288
  55,050
  58,960
  63,024
  67,248
  71,641
  76,212
  80,969
  85,922
  91,082
  96,460
  102,069
  107,921
  114,029
  120,408
  127,071
  134,036
  141,318
  148,935
  156,904
  165,244
Variable operating expenses, $m
  18,330
  20,254
  22,274
  24,388
  26,597
  28,900
  31,298
  33,793
  36,388
  39,084
  41,002
  43,914
  46,941
  50,087
  53,359
  56,763
  60,306
  63,996
  67,839
  71,845
  76,022
  80,381
  84,930
  89,681
  94,644
  99,832
  105,255
  110,928
  116,864
  123,076
Fixed operating expenses, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  18,330
  20,254
  22,274
  24,388
  26,597
  28,900
  31,298
  33,793
  36,388
  39,084
  41,002
  43,914
  46,941
  50,087
  53,359
  56,763
  60,306
  63,996
  67,839
  71,845
  76,022
  80,381
  84,930
  89,681
  94,644
  99,832
  105,255
  110,928
  116,864
  123,076
Operating income, $m
  5,093
  5,752
  6,444
  7,168
  7,925
  8,714
  9,536
  10,390
  11,279
  12,203
  14,048
  15,046
  16,083
  17,161
  18,282
  19,448
  20,662
  21,926
  23,243
  24,616
  26,047
  27,540
  29,099
  30,727
  32,427
  34,204
  36,063
  38,006
  40,040
  42,168
EBITDA, $m
  8,190
  9,094
  10,042
  11,034
  12,071
  13,152
  14,278
  15,450
  16,668
  17,934
  19,249
  20,616
  22,037
  23,515
  25,051
  26,649
  28,312
  30,044
  31,848
  33,729
  35,690
  37,736
  39,872
  42,103
  44,433
  46,868
  49,414
  52,078
  54,864
  57,780
Interest expense (income), $m
  1,020
  -2,005
  -1,615
  -1,204
  -771
  -319
  154
  647
  1,160
  1,694
  2,249
  2,826
  3,426
  4,050
  4,697
  5,371
  6,071
  6,800
  7,558
  8,348
  9,170
  10,028
  10,922
  11,854
  12,828
  13,845
  14,907
  16,018
  17,178
  18,393
  19,663
Earnings before tax, $m
  7,098
  7,367
  7,647
  7,940
  8,244
  8,560
  8,889
  9,230
  9,585
  9,954
  11,222
  11,620
  12,033
  12,464
  12,911
  13,377
  13,863
  14,368
  14,895
  15,445
  16,019
  16,619
  17,244
  17,898
  18,582
  19,297
  20,045
  20,828
  21,647
  22,505
Tax expense, $m
  1,916
  1,989
  2,065
  2,144
  2,226
  2,311
  2,400
  2,492
  2,588
  2,688
  3,030
  3,137
  3,249
  3,365
  3,486
  3,612
  3,743
  3,879
  4,022
  4,170
  4,325
  4,487
  4,656
  4,833
  5,017
  5,210
  5,412
  5,624
  5,845
  6,076
Net income, $m
  5,181
  5,378
  5,583
  5,796
  6,018
  6,249
  6,489
  6,738
  6,997
  7,266
  8,192
  8,482
  8,784
  9,098
  9,425
  9,765
  10,120
  10,489
  10,874
  11,275
  11,694
  12,132
  12,588
  13,066
  13,565
  14,087
  14,633
  15,204
  15,803
  16,429

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  80,215
  89,063
  98,349
  108,070
  118,224
  128,813
  139,840
  151,313
  163,243
  175,643
  188,528
  201,918
  215,835
  230,302
  245,348
  260,999
  277,290
  294,253
  311,924
  330,344
  349,552
  369,592
  390,510
  412,355
  435,176
  459,028
  483,966
  510,050
  537,341
  565,904
Adjusted assets (=assets-cash), $m
  80,215
  89,063
  98,349
  108,070
  118,224
  128,813
  139,840
  151,313
  163,243
  175,643
  188,528
  201,918
  215,835
  230,302
  245,348
  260,999
  277,290
  294,253
  311,924
  330,344
  349,552
  369,592
  390,510
  412,355
  435,176
  459,028
  483,966
  510,050
  537,341
  565,904
Revenue / Adjusted assets
  0.292
  0.292
  0.292
  0.292
  0.292
  0.292
  0.292
  0.292
  0.292
  0.292
  0.292
  0.292
  0.292
  0.292
  0.292
  0.292
  0.292
  0.292
  0.292
  0.292
  0.292
  0.292
  0.292
  0.292
  0.292
  0.292
  0.292
  0.292
  0.292
  0.292
Average production assets, $m
  63,733
  70,763
  78,141
  85,865
  93,933
  102,346
  111,107
  120,223
  129,702
  139,554
  149,791
  160,430
  171,488
  182,983
  194,936
  207,372
  220,316
  233,793
  247,834
  262,469
  277,730
  293,653
  310,273
  327,629
  345,761
  364,712
  384,527
  405,251
  426,935
  449,629
Working capital, $m
  11,711
  13,003
  14,359
  15,778
  17,261
  18,807
  20,417
  22,092
  23,833
  25,644
  27,525
  29,480
  31,512
  33,624
  35,821
  38,106
  40,484
  42,961
  45,541
  48,230
  51,035
  53,960
  57,014
  60,204
  63,536
  67,018
  70,659
  74,467
  78,452
  82,622
Total debt, $m
  -29,916
  -22,289
  -14,284
  -5,905
  2,848
  11,975
  21,481
  31,371
  41,654
  52,343
  63,450
  74,992
  86,988
  99,459
  112,428
  125,920
  139,962
  154,584
  169,817
  185,695
  202,252
  219,527
  237,558
  256,388
  276,060
  296,621
  318,118
  340,602
  364,127
  388,748
Total liabilities, $m
  69,145
  76,772
  84,777
  93,156
  101,909
  111,037
  120,542
  130,432
  140,716
  151,404
  162,511
  174,053
  186,050
  198,521
  211,490
  224,982
  239,024
  253,646
  268,879
  284,756
  301,314
  318,588
  336,620
  355,450
  375,122
  395,682
  417,179
  439,663
  463,188
  487,809
Total equity, $m
  11,070
  12,291
  13,572
  14,914
  16,315
  17,776
  19,298
  20,881
  22,528
  24,239
  26,017
  27,865
  29,785
  31,782
  33,858
  36,018
  38,266
  40,607
  43,046
  45,587
  48,238
  51,004
  53,890
  56,905
  60,054
  63,346
  66,787
  70,387
  74,153
  78,095
Total liabilities and equity, $m
  80,215
  89,063
  98,349
  108,070
  118,224
  128,813
  139,840
  151,313
  163,244
  175,643
  188,528
  201,918
  215,835
  230,303
  245,348
  261,000
  277,290
  294,253
  311,925
  330,343
  349,552
  369,592
  390,510
  412,355
  435,176
  459,028
  483,966
  510,050
  537,341
  565,904
Debt-to-equity ratio
  -2.700
  -1.810
  -1.050
  -0.400
  0.170
  0.670
  1.110
  1.500
  1.850
  2.160
  2.440
  2.690
  2.920
  3.130
  3.320
  3.500
  3.660
  3.810
  3.950
  4.070
  4.190
  4.300
  4.410
  4.510
  4.600
  4.680
  4.760
  4.840
  4.910
  4.980
Adjusted equity ratio
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  5,181
  5,378
  5,583
  5,796
  6,018
  6,249
  6,489
  6,738
  6,997
  7,266
  8,192
  8,482
  8,784
  9,098
  9,425
  9,765
  10,120
  10,489
  10,874
  11,275
  11,694
  12,132
  12,588
  13,066
  13,565
  14,087
  14,633
  15,204
  15,803
  16,429
Depreciation, amort., depletion, $m
  3,098
  3,342
  3,598
  3,866
  4,146
  4,438
  4,743
  5,059
  5,388
  5,730
  5,201
  5,571
  5,954
  6,354
  6,769
  7,200
  7,650
  8,118
  8,605
  9,113
  9,643
  10,196
  10,773
  11,376
  12,006
  12,664
  13,352
  14,071
  14,824
  15,612
Funds from operations, $m
  8,279
  8,720
  9,181
  9,662
  10,164
  10,687
  11,231
  11,797
  12,386
  12,997
  13,393
  14,053
  14,739
  15,452
  16,194
  16,966
  17,770
  18,607
  19,479
  20,389
  21,338
  22,328
  23,362
  24,442
  25,571
  26,751
  27,985
  29,276
  30,627
  32,041
Change in working capital, $m
  1,227
  1,292
  1,356
  1,419
  1,483
  1,546
  1,610
  1,675
  1,742
  1,810
  1,881
  1,955
  2,032
  2,112
  2,197
  2,285
  2,378
  2,477
  2,580
  2,689
  2,804
  2,926
  3,054
  3,189
  3,332
  3,482
  3,641
  3,808
  3,984
  4,170
Cash from operations, $m
  7,052
  7,428
  7,825
  8,243
  8,682
  9,141
  9,621
  10,122
  10,644
  11,186
  11,512
  12,098
  12,707
  13,340
  13,997
  14,681
  15,391
  16,130
  16,899
  17,699
  18,533
  19,402
  20,308
  21,253
  22,239
  23,268
  24,344
  25,467
  26,642
  27,871
Maintenance CAPEX, $m
  -1,981
  -2,213
  -2,457
  -2,713
  -2,981
  -3,262
  -3,554
  -3,858
  -4,174
  -4,504
  -4,846
  -5,201
  -5,571
  -5,954
  -6,354
  -6,769
  -7,200
  -7,650
  -8,118
  -8,605
  -9,113
  -9,643
  -10,196
  -10,773
  -11,376
  -12,006
  -12,664
  -13,352
  -14,071
  -14,824
New CAPEX, $m
  -6,680
  -7,030
  -7,378
  -7,724
  -8,068
  -8,413
  -8,761
  -9,116
  -9,479
  -9,852
  -10,238
  -10,639
  -11,057
  -11,495
  -11,954
  -12,436
  -12,943
  -13,478
  -14,041
  -14,635
  -15,261
  -15,923
  -16,620
  -17,356
  -18,132
  -18,951
  -19,814
  -20,724
  -21,684
  -22,694
Cash from investing activities, $m
  -8,661
  -9,243
  -9,835
  -10,437
  -11,049
  -11,675
  -12,315
  -12,974
  -13,653
  -14,356
  -15,084
  -15,840
  -16,628
  -17,449
  -18,308
  -19,205
  -20,143
  -21,128
  -22,159
  -23,240
  -24,374
  -25,566
  -26,816
  -28,129
  -29,508
  -30,957
  -32,478
  -34,076
  -35,755
  -37,518
Free cash flow, $m
  -1,609
  -1,815
  -2,011
  -2,194
  -2,368
  -2,533
  -2,694
  -2,852
  -3,009
  -3,169
  -3,572
  -3,742
  -3,921
  -4,110
  -4,310
  -4,524
  -4,753
  -4,997
  -5,260
  -5,541
  -5,842
  -6,164
  -6,509
  -6,877
  -7,270
  -7,689
  -8,134
  -8,609
  -9,112
  -9,647
Issuance/(repayment) of debt, $m
  7,218
  7,627
  8,005
  8,380
  8,753
  9,127
  9,505
  9,890
  10,283
  10,688
  11,107
  11,542
  11,996
  12,471
  12,969
  13,492
  14,042
  14,622
  15,233
  15,877
  16,557
  17,275
  18,031
  18,830
  19,672
  20,560
  21,497
  22,484
  23,525
  24,621
Issuance/(repurchase) of shares, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  7,218
  7,627
  8,005
  8,380
  8,753
  9,127
  9,505
  9,890
  10,283
  10,688
  11,107
  11,542
  11,996
  12,471
  12,969
  13,492
  14,042
  14,622
  15,233
  15,877
  16,557
  17,275
  18,031
  18,830
  19,672
  20,560
  21,497
  22,484
  23,525
  24,621
Total cash flow (excl. dividends), $m
  5,609
  5,812
  5,994
  6,185
  6,385
  6,594
  6,812
  7,038
  7,274
  7,519
  7,535
  7,800
  8,075
  8,361
  8,659
  8,968
  9,290
  9,625
  9,973
  10,337
  10,716
  11,111
  11,523
  11,953
  12,402
  12,872
  13,363
  13,876
  14,412
  14,974
Retained Cash Flow (-), $m
  -1,151
  -1,221
  -1,282
  -1,342
  -1,401
  -1,461
  -1,522
  -1,583
  -1,646
  -1,711
  -1,778
  -1,848
  -1,921
  -1,997
  -2,076
  -2,160
  -2,248
  -2,341
  -2,439
  -2,542
  -2,651
  -2,766
  -2,887
  -3,015
  -3,149
  -3,292
  -3,442
  -3,600
  -3,766
  -3,942
Prev. year cash balance distribution, $m
  16,346
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  20,804
  4,591
  4,713
  4,844
  4,984
  5,133
  5,290
  5,455
  5,628
  5,808
  5,757
  5,952
  6,155
  6,365
  6,583
  6,808
  7,042
  7,284
  7,535
  7,795
  8,065
  8,345
  8,636
  8,938
  9,253
  9,580
  9,921
  10,276
  10,646
  11,032
Discount rate, %
  5.60
  5.88
  6.17
  6.48
  6.81
  7.15
  7.50
  7.88
  8.27
  8.69
  9.12
  9.58
  10.06
  10.56
  11.09
  11.64
  12.22
  12.84
  13.48
  14.15
  14.86
  15.60
  16.38
  17.20
  18.06
  18.96
  19.91
  20.91
  21.95
  23.05
PV of cash for distribution, $m
  19,701
  4,095
  3,937
  3,768
  3,586
  3,392
  3,188
  2,974
  2,752
  2,525
  2,204
  1,986
  1,771
  1,561
  1,360
  1,169
  991
  829
  682
  552
  440
  344
  264
  198
  146
  105
  74
  50
  34
  22
Current shareholders' claim on cash, %
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

National Grid plc 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. The Company's segments include UK Electricity Transmission, which is engaged in high voltage electricity transmission networks in Great Britain; UK Gas Transmission, which is the gas transmission network in Great Britain and United Kingdom liquefied natural gas (LNG) storage activities; UK Gas Distribution, which includes approximately four of the eight regional networks of Great Britain's gas distribution system, and US Regulated, which includes gas distribution networks, electricity distribution networks and high voltage electricity transmission networks in New York, and New England and electricity generation facilities in New York. Its other activities relate to non-regulated businesses and other commercial operations not included within the above segments.

FINANCIAL RATIOS  of  National Grid ADR (NGG)

Valuation Ratios
P/E Ratio 19.5
Price to Sales 10.1
Price to Book 7.4
Price to Tangible Book
Price to Cash Flow 28.9
Price to Free Cash Flow 87.9
Growth Rates
Sales Growth Rate 13.8%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 15.3%
Cap. Spend. - 3 Yr. Gr. Rate 2.4%
Financial Strength
Quick Ratio 2
Current Ratio 0
LT Debt to Equity 113.6%
Total Debt to Equity 140.6%
Interest Coverage 4
Management Effectiveness
Return On Assets 13.6%
Ret/ On Assets - 3 Yr. Avg. 8%
Return On Total Capital 17.1%
Ret/ On T. Cap. - 3 Yr. Avg. 9.7%
Return On Equity 46%
Return On Equity - 3 Yr. Avg. 27.7%
Asset Turnover 0.2
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 30%
EBITDA Margin - 3 Yr. Avg. 30.6%
Operating Margin 21.3%
Oper. Margin - 3 Yr. Avg. 22.3%
Pre-Tax Margin 14.5%
Pre-Tax Margin - 3 Yr. Avg. 15.6%
Net Profit Margin 51.8%
Net Profit Margin - 3 Yr. Avg. 28.9%
Effective Tax Rate 17.1%
Eff/ Tax Rate - 3 Yr. Avg. 19.8%
Payout Ratio 18.8%

NGG stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the NGG stock intrinsic value calculation we used $20969.3165969 million for the last fiscal year's total revenue generated by National Grid ADR. The default revenue input number comes from 0001 income statement of National Grid ADR. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our NGG stock valuation model: a) initial revenue growth rate of 11.7% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 5.6%, whose default value for NGG is calculated based on our internal credit rating of National Grid ADR, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of National Grid ADR.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of NGG stock the variable cost ratio is equal to 78.7%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for NGG stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for National Grid ADR.

Corporate tax rate of 27% is the nominal tax rate for National Grid ADR. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the NGG stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for NGG are equal to 272.1%.

Life of production assets of 28.8 years is the average useful life of capital assets used in National Grid ADR operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for NGG is equal to 50%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $26264.9930265 million for National Grid ADR - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 75.858 million for National Grid ADR is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of National Grid ADR at the current share price and the inputted number of shares is $4.1 billion.

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COMPANY NEWS

▶ Hedge Funds Were Overwhelmingly Bullish On This Stock   [Nov-05-18 02:06PM  Insider Monkey]
▶ Is National Grid plc a Buy?   [Sep-21-18 02:33PM  Motley Fool]
▶ 3 Dividend Stocks That Pay You More Than GM Does   [Sep-16-18 01:01PM  Motley Fool]
▶ Stocks That Fell to 3-Year Lows in the Week of Sept. 14   [Sep-15-18 12:34PM  GuruFocus.com]
▶ Does National Grid plcs (LON:NG.) PE Ratio Warrant A Buy?   [Sep-07-18 08:52AM  Simply Wall St.]
▶ National Grid plc (LON:NG.): Did It Outperform The Industry?   [Aug-18-18 04:57AM  Simply Wall St.]
▶ Why this company makes a point to hire older workers   [Jun-30-18 09:16AM  MarketWatch]
▶ National Grid Releases Northeast 80x50 Pathway   [Jun-15-18 10:00AM  PR Newswire]
▶ Is National Grid Becoming a Dividend Growth Stock?   [Jun-07-18 10:17AM  Motley Fool]
▶ New Strong Sell Stocks for May 25th   [May-25-18 07:34AM  Zacks]
▶ [$$] National Grid earnings rise despite US storm hit   [May-17-18 03:26AM  Financial Times]
▶ [$$] National Grid plans green super highway   [May-16-18 10:45PM  Financial Times]
▶ [$$] Caterpillar Names National Grid Executive as New CFO   [May-04-18 09:47AM  The Wall Street Journal]
▶ Why National Grid plc (LON:NG.) Is A Top Dividend Stocks   [May-02-18 07:38AM  Simply Wall St.]
▶ [$$] National Grid in Deal to Sell Remaining Cadent Stake   [May-01-18 02:55AM  The Wall Street Journal]
▶ What Does National Grid plcs (LON:NG.) Share Price Indicate?   [Mar-23-18 11:44AM  Simply Wall St.]
▶ [$$] UK gas shortage eases   [Mar-02-18 03:34AM  Financial Times]
▶ [$$] National Grid plans electric car power network   [Feb-18-18 11:00PM  Financial Times]
▶ Stocks That Fell to 3-Year Lows in the Week of Jan. 12   [Jan-14-18 11:49AM  GuruFocus.com]
▶ 3 Utility Stocks You May Be Overlooking   [Jan-06-18 11:37AM  Motley Fool]
▶ Stocks That Fell to 3-Year Lows in the Week of Dec. 1   [Dec-04-17 10:16AM  GuruFocus.com]
▶ Stocks That Fell to 3-Year Lows in the Week of Dec. 1   [Dec-01-17 10:38PM  GuruFocus.com]
▶ 3 Top Stocks That Aren't on Wall Street's Radar   [Nov-30-17 06:03AM  Motley Fool]
▶ November Top Dividend Payers   [Nov-21-17 03:02AM  Simply Wall St.]
▶ Tesla power storage deal expected to help Nantucket grid reliability   [06:40AM  American City Business Journals]
▶ 3 Value Utility Stocks   [Oct-30-17 07:49PM  Motley Fool]
▶ Is It Too Late To Buy National Grid plc (LSE:NG)?   [Oct-17-17 07:19AM  Simply Wall St.]
▶ 3 High-Yield Utility Stocks   [Oct-10-17 10:10AM  Motley Fool]
▶ 3 High-Yield International Stocks   [Oct-03-17 03:30PM  Motley Fool]
▶ 3 Value Stocks for Nest-Egg Growth   [Sep-15-17 07:47AM  Motley Fool]
▶ 3 High-Yield Utility Stocks   [Aug-31-17 10:34AM  Motley Fool]
▶ 70 or Older? 3 Stocks You Should Consider Buying   [Aug-24-17 10:42AM  Motley Fool]
▶ [$$] National Grid warns on electric car home packs   [Aug-20-17 01:11PM  Financial Times]

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