Spotlight On Power Stocks: National Grid and Ceres Power

Spotlight On Power Stocks: National Grid and Ceres Power

National Grid PLC

National Grid Plc (NG) is a United Kingdom-based global electricity and gas company engaged in the transmission and distribution of electricity and gas. The company offers installation and maintenance services to suppliers and metering. It offers services such as generation, transmission, and distribution of electricity, network services, interconnectors operation. The company’s other activities include metering and property services, financing, LNG storage and corporate activities. The company operates in the UK, US and North Eastern countries.

Recent News

Quadgas Investments acquired the remaining 39 per cent interest in Cadent gas. Quadgas comprises of Macquarie Infrastructure and Real Assets (Europe) Limited, CIC Capital Corporation, Allianz Capital Partners, Hermes Investment Management, Dalmore Capital, the Qatar Investment Authority and Amber Infrastructure Limited/International Public Partnerships, which together form a consortium of long-term infrastructure investors

National Grid PLC sold the remaining 39 per cent stake in the holding company for the Cadent gas for £1,971 million. The cash proceeds from this sale will be utilised in the business across the verticals in the group over the medium term.

Earlier this month, the scrip dividend per share of the company is allowing shareholders to obtain new fully paid ordinary shares, instead of a cash dividend. It is available to ordinary shareholders on the registration date of May 31, 2019. In FY19, the final scrip dividend per share reference price was 789.74 pence for the ordinary shareholders and the scrip ADR final dividend per share reference price was US$49.9866 cents for American Depositary Receipt (ADR) holders.

Financial Highlights for Financial Year 2019 (£, million)

(Source: Company’s filings, LSE)

 The company’s reported revenue from continuing operation decreased by 2.1 per cent to £14.9 billion as compared with the financial year 2018 of £15.2 billion, due to the decline in the UK Electricity transmission and the UK Gas Transmission segment but increased in the US Regulated segment. The company’s statutory results for the financial year 2019 were impacted by exceptional charges incurred in respect of the dispute in Massachusetts Gas labour, the US and the UK restructuring programme and cost efficiency, and impairment of development costs in respect of the termination of the Horizon nuclear connection and NuGen projects.

Underlying operating profit declined by 2 per cent to £3.4 billion against the £3.5 billion in FY18, was impacted by the tax reform on US regulated revenues and return of certain UK Gas Transmission revenue allowances. Underlying profit after tax (continuing operations) surged by 3 per cent to £2 billion as compared with the financial year 2018 of £1.9 billion. Adjusted earnings per share increased by 7 per cent to 59 pence as compared to 55.3 pence in FY18. Underlying earnings per share stood at 58.9 pence, an increase of 5 per cent as compared with the previous year data.

Capital investment surged by 6 per cent to £4.5 billion against the £4.3 billion in FY18. Group Return on equity was down by 50bps to 11.8 per cent as compared with the financial year 2018 of 12.3 per cent, due to the removal of the Cadent contribution from underlying results. Assets growth climbed by 130bps to 7.2 per cent as compared to the prior year data. Regulated gearing increased by 200bps to 66 per cent. The board proposed a final dividend per share of 31.26 pence, an increase from the previous year data. The dividend will be paid on August 14, 2019.

Share price performance

Daily Chart as at July-02-19, before the market close (Source: Thomson Reuters)

At the time of writing (before the market close, at 09:25 AM GMT), shares of the National Grid Plc were trading at GBX 848.6 and moved up by 1.216 per cent against the previous closing price.

The beta of the stock stood at 0.74 which means it is less volatile as compared to the benchmark index and has a Dividend yield of 5.54 per cent.

Volume Summary

The 5-day average daily shares exchanged hands were stood at 6,798,164.80, which was around 18.4 per cent below the 30-day average daily volume exchanged hands at the London Stock Exchange. Today’s volume in the stock stood at 937,379 with 2,096 trades took place at the London Stock Exchange (before the market close).

52wk H/L range

In the past 52-weeks, shares of the National Grid Plc have registered a high price of GBX 892.00 as on Mar 27, 2019; and a low price of GBX 744.50 as on Dec 27, 2018. At the current trading level, as quoted in the price chart, its shares were trading 5.93 per cent below the 52-week high price level and 12.71 per cent above the 52-week low price level.

Price Performance (%)

On a Y-o-Y basis, shares of the National Grid Plc have delivered a positive price return of 0.08 per cent. However, on a year-to-date basis, the stock has recorded a positive price return of approximately 9.8 per cent and was able to beat the index quite comfortably. For the past three months, the stock has generated 0.44 per cent negative returns as against 2.83 per cent negative returns of the benchmark sector.

Simple Moving Average (SMA)

The shares of the company (at the time of writing) were trading above the 30-days and 200-days SMA, which shows a positive trend in the stock price movement and could further move up from the current trading levels.

Relative Strength Index (RSI)

Share’s RSI for the 30-days, 14-days and 9-days stood at 52.98, 56.05 and 57.68 respectively. Also, the stock’s 3-days RSI stood at 63.34. The RSI is hovering around in a normal range. The volatility of the stock for 200 Days, 90 Days, 30 Days stood at 21.82, 16.99 and 21.03 respectively.

Ceres Power Holdings PLC

Ceres Power Holdings PLC (CWR) is headquartered in United Kingdom. The fuel cell technology is developed by Ceres Power. The steel sheet is perforated with a ceramic layer that generates power directly from fuel.

The required temperature for the SteelCell technology to operate lies between 500 and 600 degree Celsius. The technology has evolved and is manufactured by using commodity materials like Steel and uses existing facilities of mains natural gas. This technology targets the automotive sector.

 Recent News

Ceres Power in partnership with Japan’s Miura Co is set to launch a product in October 2019 focused on the commercial building sector in Japan. The product uses Ceres Power’s SteelCell® technology which operates on 4.2kW. Japan’s Miura Co is a boiler manufacturer for industrial use. The main objective is to provide clean energy and hot water to commercial buildings in a cost-effective manner with low carbon emissions.

Financial Highlights for H1 FY19 (£, thousand)

(Source: Company’s filings, LSE)

The revenue and other operating income of the company stood at £8.3 million, up by 168 per cent over the comparable period due to new licences. The gross margin surged to 82 per cent from 46 per cent due to increased margin licence fees. The operating loss of the company dipped by 50 per cent to £3.0 million from a loss of £6.2 million over the comparable period. The company has a strong financial position with cash of £78.4 million at the end of the recorded period.

Share price performance

Daily Chart as at July-02-19, before the market close (Source: Thomson Reuters)

At the time of writing (before the market close, at 10:10 AM GMT), shares of the Ceres Power Holdings PLC were trading at GBX 171 and was down by 0.29 per cent against the previous closing price.

The beta of the stock stood at 0.37 which means it is less volatile as compared to the benchmark index.

Volume Summary

The 5-day average daily shares exchanged hands were stood at 91,841.20, which was around 53.90 per cent below the 30-day average daily volume exchanged hands at the London Stock Exchange. Today’s volume in the stock stood at 31,578 with 20 trades took place at the London Stock Exchange (before the market close).

52wk H/L range

In the past 52-weeks, shares of the Ceres Power Holdings PLC have registered a high price of GBX 209.95 as on Sep 19, 2018; and a low price of GBX 123.26 as on Feb 13, 2019. At the current trading level, as quoted in the price chart, its shares were trading 18.31 per cent below the 52-week high price level and 39.14 per cent above the 52-week low price level.

Price Performance (%)

On a Y-o-Y basis, shares of the Ceres Power Holdings PLC have delivered a positive price return of 11.91 per. However, on a year-to-date basis, the stock has recorded a positive price return of approximately 4.57 per cent. For the past three months, the stock has generated 13.95 per cent positive returns.

Simple Moving Average (SMA)

The shares of the company (at the time of writing) were trading below the 30-days and 60-days SMA, which shows a negative trend in the stock price movement and could further move down from the current trading levels.