NGGNational Grid plc
Is the business good?
The checks split: nothing decisive, though earnings fully cash-backed (1.9×).
Operating profit is fully backed by cash.
Margins have held roughly steady, a stable cost structure.
Margin-driven, fat margins on slower asset turns. ROE 8% = margin × turnover × leverage.
Unless marked, from derived.
Where this answer is blind. The F-score rewards improvement, so an already-elite company can score mid-pack.
How good a business is NGG?
National Grid plc earns 5.2% on the capital it employs against a 9.0% cost of capital, so growth costs more than it returns.
Return on invested capital · cost of capital 9.0% · 3.8 points below what the capital costs: growth destroys value
- Operating margin
- 31%
Operating margin · Utilities - Regulated Electric median 22% · fiscal year to FY2026
- Cash conversion
- 1.87×
Cash conversion · 1.83× a year ago · operating cash flow covers the operating profit after tax
- Share count, year on year
- +5.1%
Share count, year on year · shareholders own a smaller slice than a year ago
| Year | Operating margin |
|---|---|
| FY2021 | 18% |
| FY2022 | 24% |
| FY2023 | 23% |
| FY2024 | 23% |
| FY2025 | 27% |
| FY2026 | 31% |
Details›
- Gross marginfiscal year to FY2026
- 97%
- Operating marginfiscal year to FY2026
- 31%
- Net marginfiscal year to FY2026
- 18%
- Free cash flow margin
- −12%
- R&D as % of revenue
- 0.21%
- Revenue, trailing twelve months
- $17.7B
- Free cash flow, trailing twelve months
- −$2.13B
- Net income, trailing twelve months
- $3.24B
- Return on invested capitaloperating profit after tax ÷ debt + equity − cash
- 5.2%
Margins, capital and share counts from the statements as filed with the SEC; cash conversion is operating cash flow over operating profit after tax.
Utilities, Regulated Electric
Ranks #11 of 14 by RyuScore