National Grid plc’s (LON:NG.) Share Price Not Quite Adding Up
With a price-to-earnings (or “P/E”) ratio of 18.3x National Grid plc (LON:NG.) may be sending bearish signals at the moment, given that almost half of all companies in the United Kingdom have P/E ratios under 15x and even P/E’s lower than 9x are not unusual. Nonetheless, we’d need to dig a little deeper to determine if there is a rational basis for the elevated P/E.
With earnings growth that’s inferior to most other companies of late, National Grid has been relatively sluggish. One possibility is that the P/E is high because investors think this lacklustre earnings performance will improve markedly. You’d really hope…
