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National Grid PLC (NYSE:NGG)
Intrinsic Value (DCF Projected)
$33.91 (As of Today)

Since the intrinsic value calculations based on Discounted Cash Flow Intrinsic Value (DCF), or Discounted Earnings (DCE) Intrinsic Value (DE) cannot be applied to companies without consistent revenue and earnings, GuruFocus developed a valuation model based on normalized Discounted Cash Flow and Book Value of the company. The details of how we calculate the intrinsic value of stocks are described in detail here.

As of today, National Grid PLC's DCF projected intrinsic value is $33.91. The stock price of National Grid PLC is $69.54. Therefore, National Grid PLC's Price to Intrinsic Value (DCF Projected) Ratio of today is 2.1.

NGG' s 10-Year Price to Intrinsic Value (DCF Projected) Range
Min: 1.19   Max: 16.27
Current: 2.1

1.19
16.27

During the past 13 years, the highest Price to Intrinsic Value (DCF Projected) Ratio of National Grid PLC was 16.27. The lowest was 1.19. And the median was 1.77.

NGG's Price to Intrinsic Value (DCF Projected) is ranked higher than
61% of the 437 Companies
in the Global Utilities - Regulated Electric industry.

( Industry Median: 1.50 vs. NGG: 2.10 )

Definition

Since the intrinsic value calculations based on Discounted Cash Flow Intrinsic Value (DCF), or Discounted Earnings (DCE) Intrinsic Value (DE) cannot be applied to companies without consistent revenue and earnings, GuruFocus developed a valuation model based on normalized Discounted Cash Flow and Book Value of the company.

The details of how we calculate the intrinsic value of stocks are described in detail here.

This method smooths out the free cash flow over the past 6-7 years, multiplies the results by a growth multiple, and adds a portion of total equity.

Value = ((Growth Multiple)*Free Cash Flow(6 year avg) + 0.8*Total Equity(most recent))/Shares Outstanding

In the case of negative total equity, the following formula is used (see the Total Equity section for the reason):

Value = ((Growth Multiple)*Free Cash Flow(6 year avg) + Total Equity(most recent)/0.8)/Shares Outstanding


Here National Grid PLC's FCF(6 year avg) is calculate as

National Grid PLC Annual Data

200803200903201003201103201203201303
total_freecashflow 5703352,1552,8221,405553

Add all the adjusted EPS together and divide 6 will get National Grid PLC's FCF(6 year avg) = $1,306.62.

National Grid PLC's DCF Projected Intrinsic Value for today is calculated as

Intrinsic Value=(Growth Multiple*Free Cash Flow(6 year avg)+Total Equity(Mar13)*0.8)/Shares Outstanding
=(9.52035159596*1306.62268815+15663.093415*0.8)/736.400
=33.91

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.


Explanation

The growth multiple is capped between 8.35 and 17.74.

Total equity weighting is more art than science and it should always be revisited in more detail when researching a company. Weightings from 0% to 100% to more than 100% are possible. 80% was chosen as a happy medium after taking the above ideas into consideration. Learn more here.

National Grid PLC's Price to DCF Projected Intrinsic Value Ratio for today is calculated as

Price to DCF Projected Intrinsic Value=Share Price/DCF Projected Intrinsic Value
=69.54/33.9081777926
=2.05

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.


Related Terms

Intrinsic Value (DE), Intrinsic Value (DCF), Free Cash Flow


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

National Grid PLC Annual Data

Mar04Mar05Mar06Mar07Mar08Mar09Mar10Mar11Mar12Mar13
iv_dcf_share 2.758.5119.5134.6742.5238.5543.7137.9634.9733.91

National Grid PLC Semi-Annual Data

Mar09Sep09Mar10Sep10Mar11Sep11Mar12Sep12Mar13Sep13
iv_dcf_share 38.550.0043.710.0037.960.0034.970.0033.910.00
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