I don’t at present personal Nationwide Grid (LSE:NG.) shares in my Shares and Shares ISA or Self-Invested Private Pension (SIPP). However I’m seeking to construct a sizeable stake once I subsequent have money to take a position.

I already personal an array of FTSE 100 shares together with Ashtead Group, Authorized & Normal, Aviva and Rio Tinto. Nationwide Grid — which focuses on the transmission and distribution of electrical energy within the UK — is the following blue-chip share on my purchasing checklist.

Listed below are three the reason why I believe it’s a high inventory to think about in the present day.

1. Peace of thoughts

Proudly owning Nationwide Grid shares has been an eventful expertise extra not too long ago. And never in a great way.

Its share price sank following a badly-received technique replace in Could. In it, the corporate introduced plans to scale back dividends per share following a £6.8bn rights subject.

It stays dangerous however it’s essential to do not forget that Nationwide Grid has traditionally offered a steady return over time. And as a long-term investor, that is what nonetheless attracts me to the corporate in the present day.

Retaining Britain’s energy grid working is a important exercise that’s unaffected by broader financial situations. Consequently, revenues and money flows on the agency proceed to stream in 12 months after 12 months.

What’s extra, underneath Ofgem laws, Nationwide Grid’s allowed to make an inexpensive return on its investments. It additionally operates as a monopoly, which means that gross sales usually are not underneath menace from competing companies.

Regulatory adjustments later down the road may injury revenues. However in the meanwhile it nonetheless stays some of the steady and stress-free shares on the market.

2. Dividend potential

Such stability additionally ensures the corporate has the means and the arrogance to pay a strong dividend every 12 months.

I discussed earlier that Nationwide Grid’s dividends per share will fall on this monetary 12 months (to March 2025). Nevertheless, the yield right here nonetheless stands at a powerful 4.9%, nicely above the three.5% common for FTSE shares.

The enterprise plans to extend dividends instantly after this 12 months’s rebasement too, pushing the yield above 5% by fiscal 2027. This continues its coverage of elevating money rewards according to CPIH (client costs index together with proprietor occupiers’ housing prices).

As issues stand, it seems set to stay a superb dividend payer for the foreseeable future.

3. Inexperienced funding

Demand for clear power’s rocketing because the transition from fossil fuels intensifies. And Nationwide Grid’s ramping up funding to capitalise on this chance.

In Could’s technique replace, it introduced plans to spend £60bn between now and 2029 to improve its power infrastructure. This is a gigantic quantity, greater than double expenditure of 2019-2024. And it prompted the agency to launch that near-£7bn rights subject.

However the long-term advantages for shareholders might be vital. Hargreaves Lansdown analysts word that “the sheer scale of the funding plans brings with it elevated execution threat, however ought to administration pull it off, buyers will possible be rewarded for his or her persistence“.

Like administration, I really feel that the potential advantages of Nationwide Grid’s inexperienced drive outweigh the dangers. The technique’s anticipated to realize compound annual underlying earnings progress of 6-8%. This might result in vital share price appreciation and a giant increase to dividends over time.