The National Grid (LSE:NG.) share price has quietly delivered some impressive returns over the last five years. Including dividends, shareholders have pocketed an 81.2% total return – not bad for a mature energy infrastructure enterprise.
But that’s history. The more interesting question is what the next five years could hold.
What the numbers are already saying
The group’s latest results for its 2026 fiscal year (ending in March) were genuinely encouraging. Underlying earnings per share rose 8% at constant currency to 78.0p, earnings climbed 15% to £3.24bn, and the company delivered a record £11.6bn of capital investment that was up 18% on the prior year.
The total dividend also came in 3.8% higher, in line with UK CPIH inflation, reaching 48.49p per share.
But what makes this really interesting is what management has guided for next.
For the next financial year alone, National Grid expects underlying EPS growth of 13%-15%, driven by higher allowed revenues as the business steps up from the RIIO-T2 to RIIO-T3 regulatory price control. And over the full five-year framework (to 2030/31), management’s guiding for an 8%-10% underlying earnings compound growth rate.
Assuming the company hits these figures, and the group’s current price-to-earnings ratio is maintained, that means underlying earnings per share are on track to reach up to 125.6p, placing the share price at around 1,950p – roughly 61% higher than where it’s trading today.
So is this a realistic expectation?
What’s on the horizon?
The structural backdrop is arguably as strong as it has ever been for a company like National Grid. The energy transition is accelerating demand for grid infrastructure at precisely the moment the business is scaling up its investment programme.
What’s more, the UK government’s actively supporting this. The RIIO-T3 price control is approved and secured, and two-thirds of the entire £70bn investment plan is already covered by regulatory agreements.
Meanwhile in the US, AI-driven data centre demand is creating a new wave of electricity load growth directly within National Grid’s New York and New England service territories.
In other words, the tailwinds behind this business are long-lasting, policy-backed, and accelerating.
However, it’s not without risk
The most immediate concern is the balance sheet. Net debt’s already risen to £44.2bn and will continue to climb as the investment programme accelerates. Regulatory gearing of 61% is expected to trend back to the high-60% range by 2030/31, which is manageable. But it leaves little room for error if interest rates reverse course or regulatory settlements disappoint.
Still, it’s hard to ignore the earnings trajectory. And with one of the most significant energy infrastructure buildouts now underway, National Grid’s share price looks nicely positioned to deliver some steady compounding returns.
That’s why I think investors may want to investigate National Grid and its share price a little further. And it’s not the only steady compounder I’ve got my eye on…
Should you invest £5,000 in National Grid Plc right now?
When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.
And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if National Grid Plc made the list?
Zaven Boyrazian does not hold any positions in the companies mentioned.
