The Nationwide Grid (LSE: NG.) share price took a nosedive this summer time, and that shook confidence fairly badly.

The important thing factor is, the vitality community operator demolished some long-standing assumptions in a single day.

These assumptions have been that it will carry on doing the identical factor, 12 months in and 12 months out. That may generate regular earnings, with a transparent outlook. And the web consequence could be a stream of dividends filling up shareholders’ pockets.

However that got here crashing down on 23 Could, and traders dumped the inventory. I believe that was a giant mistake.

New begin

It’s just about sunk in by now, however Nationwide Grid shocked us with a brand new £7bn fairness concern on full-year outcomes day.

And horror of horrors, the dividend was rebased. Solely by just a little, however for many people that will have been unthinkable.

But now it’s occurred and I’ve had extra time to suppose by means of it, I consider we have been fallacious to be shocked. I don’t find out about others on the market, however with hindsight I do know I used to be a bit naive.

The vitality enterprise is in the course of a giant shake-up, we are able to’t have missed that. We’re going to be seeing ever extra renewable vitality sources. And that brings rising demand for infrastructure, by way of each capability and expertise.

After all Nationwide Grid wants to take a position huge, not simply to maintain up, however to guide. And that can value cash.

The one actual puzzle I’m left with is… why didn’t I see it coming?

Added threat

Now our calm complacency has been shattered, what’s to cease it taking place once more? Properly, I believe we have now to see that as a risk.

If I purchase Nationwide Grid shares, I’ll issue the probabilities of future new points into my determination. And the danger of additional dividend dilution sooner or later.

The opposite factor that I believe a few of us may need ignored is Nationwide Grid’s debt. Internet debt on the finish of the 2023-24 12 months stood at £43.6bn.

That’s most likely the factor that will weigh most towards shopping for the inventory in my thoughts proper now.

Then once more, debt funding could be a profitable finance method. Particularly when it’s an organization with a secure long-term outlook for its enterprise.

So perhaps I shouldn’t let that put me off an excessive amount of?

The elephant

Let’s get again to the one factor that the majority traders have purchased Nationwide Grid shares for. That’s the dividend.

Even after the turmoil of the previous few months, we’re nonetheless a forecast dividend yield of 5.7% for the present 12 months. And erm, isn’t that tremendous enticing?

There are larger yields on the market, certain. However I believe they principally include extra threat. And forecasts present Nationwide Grid payouts getting again to regular progress once more after the rebasement.

Regardless of this new wake-up name, I nonetheless suppose Nationwide Grid could possibly be top-of-the-line FTSE 100 shares for long-term traders to think about. Even now.