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National GridNGG -0.10%72 Forward Rate of Return (Yacktman) % is 5.07% as of Mar. 2026, which is 123% above its 10-year median of 2.27. GuruFocus rates NGG with a GF Score™ of 72/100 and a GF Value™ of $51.77 (Significantly Overvalued). The stock has 4 warning signs investors should review. Among 425 Utilities - Regulated companies, National Grid ranks worse than 55.53% on this metric.
Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation. National Grid's forward rate of return for was 5.07%.
The historical rank and industry rank for National Grid's Forward Rate of Return (Yacktman) % or its related term are showing as below:
NGG'
s Forward Rate of Return (Yacktman) % Range Over the Past 10 Years
Min: -1.96 Med: 2.27 Max: 12.05
Current: 4.94
During the past 13 years, National Grid's highest Forward Rate of Return was 12.05. The lowest was -1.96. And the median was 2.27.
NGG's Forward Rate of Return (Yacktman) % is ranked worse than 55.53% of 425
companies
in the Utilities - Regulated industry
Industry Median: 6.5
vs NGG: 4.94
Unlike the Earnings Yield %, the Forward Rate of Return uses the normalized Free Cash Flow of the past five years, and considers growth. The forward rate of return can be thought of as the return that investors buying the stock today can expect from it in the future.
National Grid (NYSE:NGG) Forward Rate of Return (Yacktman) % Explanation
Unlike the Earnings Yield, the Forward Rate of Return uses the normalized Free Cash Flow of the past five years, and considers growth. The forward rate of return can be thought of as the return that investors buying the stock today can expect from it in the future.
For the growth part of the Forward Rate of Return calculation, GuruFocus uses the 5-year average growth rate of EBITDA per share as the growth rate, and the growth rate is always capped at 20%. For the Free Cash Flow we use per share data averaged over five years. The reason we use five years is to make it comparable to the growth rate.
Be Aware
In the Forward Rate of Return calculation, the growth rate is added directly to today's free cash flow yield. Therefore the calculation is reliable only if the company can grow at the same rate in the future as it did in the past. Investors should pay close attention to this when researching growth stocks. A more accurate measurement for return is Return on Capital.
National Grid Forward Rate of Return (Yacktman) % Related Terms
National Grid Forward Rate of Return (Yacktman) % Historical Data
* Premium members only.
The historical data trend for National Grid's Forward Rate of Return (Yacktman) % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
National Grid Forward Rate of Return (Yacktman) % Chart
NGG vs NEE, SO, DUK: Forward Rate of Return (Yacktman) % Comparison
For the Utilities - Regulated Electric subindustry, National Grid's Forward Rate of Return (Yacktman) %, along with its competitors' market caps and Forward Rate of Return (Yacktman) % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
National Grid Forward Rate of Return (Yacktman) % vs Utilities - Regulated Industry
For the Utilities - Regulated industry and Utilities sector, National Grid's Forward Rate of Return (Yacktman) % distribution charts can be found below:
* The bar in red indicates where National Grid's Forward Rate of Return (Yacktman) % falls into.
National Grid Forward Rate of Return (Yacktman) % Calculation
Forward Rate of Return is a concept that Don Yacktman uses in his investment approach. Yacktman explained the forward rate of return concept in detail in his interview with GuruFocus. Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation. He said in the interview (March 2012, when the S&P 500 was at about 1400):
If the business is stable, this calculation is fairly straightforward. For instance, on the S&P 500 we would normalize earnings. We would then calculate what percentage of those earnings are not reinvested in the underlying businesses and are therefore free. Historically, for the S&P 500, this has been just under 50% of earnings. Currently, we expect the S&P to earn about 70 on a normalized basis, a number which is far below reported earnings due to our adjusting for record high profit margins. $70 X ½ / 1400 gives you a normalized free cash flow yield of approximately 2.5%.
The historical real growth rate of the S&P 500 (companies) is about 1.5%. Assuming an inflation rate of 2.5%, the forward rate of return on an investment in the S&P 500 is about 6.5% today (2.5% free cash flow yield plus 1.5% real growth plus 2.5% inflation).
National Grid's Forward Rate of Return of Mar. 2026 is
Forward Rate of Return
=
Normalized Free Cash Flow
/
Price
+
5-Year EBITDA Growth Rate
=
-1.15783333
/
84.6
+
0.0582
=
4.45 %
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
What does a Forward Rate of Return (Yacktman) % of 5.07% mean?
National Grid (NGG) has a Forward Rate of Return (Yacktman) % of 5.07% as of Mar. 2026. Yacktman's forward rate of return equals the sum of normalized free-cash-flow yield plus earnings growth. View historical data on National Grid and its competitors. This is 123% above median its historical median of 2.27. According to the industry distribution chart, National Grid ranks #236 out of 425 companies in the Utilities - Regulated industry, placing it in the top 55.5%.
Is National Grid's Forward Rate of Return (Yacktman) % too high?
National Grid's current Forward Rate of Return (Yacktman) % of 5.07% is 123% above median its 10-year median of 2.27. The Utilities - Regulated industry median Forward Rate of Return (Yacktman) % is 6.50. National Grid's value of 5.07% is 22% below this industry median. Based on the distribution chart, National Grid ranks #236 out of 425 companies in the Utilities - Regulated industry, which is below the industry midpoint. Overall, National Grid has a GF Score™ of 72/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does National Grid's Forward Rate of Return (Yacktman) % compare to NEE and SO?
According to the Utilities - Regulated industry distribution chart, National Grid ranks #236 out of 425 companies for Forward Rate of Return (Yacktman) %. This places National Grid in the lower half of its industry. The industry median Forward Rate of Return (Yacktman) % is 6.50. National Grid's value of 5.07% is 22% below this benchmark. While the company's 10-year median is 2.27 vs. the industry median of 6.50, National Grid has consistently been below the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Forward Rate of Return (Yacktman) % for an Utilities - Regulated company?
The median Forward Rate of Return (Yacktman) % among Utilities - Regulated companies is 6.50, based on 425 companies in the industry. Companies in the top quartile (top 25%) have a Forward Rate of Return (Yacktman) % significantly above this median, while those in the bottom quartile fall well below. However, Forward Rate of Return (Yacktman) % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. National Grid's current Forward Rate of Return (Yacktman) % of 5.07% is 22% below the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Forward Rate of Return (Yacktman) % mean?
A high Forward Rate of Return (Yacktman) % can signal that a stock is expensive relative to its fundamentals. Yacktman's forward rate of return equals the sum of normalized free-cash-flow yield plus earnings growth. View historical data on National Grid and its competitors. For the Utilities - Regulated industry, the median Forward Rate of Return (Yacktman) % is 6.50 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. National Grid's current Forward Rate of Return (Yacktman) % is 5.07%, which is 123% above median its own 10-year median of 2.27. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is National Grid stock overvalued right now?
Based on GuruFocus' analysis, National Grid (NGG) is currently considered Significantly Overvalued. The stock's GF Value™ is $51.77, compared to a current price of $79.35 — trading 53.3% above its estimated fair value. The current Forward Rate of Return (Yacktman) % is 5.07%, which is 123% above median its 10-year median of 2.27 and 22% below the Utilities - Regulated industry median of 6.50. National Grid's overall GF Score™ is 72/100 with 4 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Forward Rate of Return (Yacktman) % calculated?
Forward Rate of Return (Yacktman) % is calculated from a company's financial statements. For National Grid (NGG), the current Forward Rate of Return (Yacktman) % is 5.07% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is National Grid (NGG) Overvalued in 2026?
Based on GuruFocus' analysis, National Grid stock appears to be overvalued.
The current stock price of $79.35 is trading 53.3% above its estimated GF Value™ of $51.77.
GuruFocus considers National Grid to be Significantly Overvalued.
Key valuation signals for NGG:
Forward Rate of Return (Yacktman) %: 5.07% (123% above median its 10-year median of 2.27)
GF Value™: $51.77 vs. price of $79.35 (53.3% above fair value)
Industry Position: 22% below the Utilities - Regulated median (#236 of 425)
No single metric tells the full story. See the NGG stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
National Grid owns and operates the electric transmission system in England and Wales. It sold the bulk of its UK gas transmission business in fiscal 2023 to fund the acquisition of PPL's UK power distribution assets. In the Northeastern United States, it serves electricity and gas customers combined in three states. It also owns regulated transmission electricity networks in the United States, metering services and merchant transmission lines in the UK.
72GF Score
Get the complete analysis for NGG
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