Income alert! Here’s the National Grid dividend forecast for 2023/24

Jon Smith shares the latest National Grid dividend forecasts from analysts and argues for it being a good buy for his overall portfolio.

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National Grid (LSE:NG) is a favourite stock for many income investors. The company has been paying out constant dividends for the past decade. With the yield during this period ranging from around 4% to 6%, it might not set the world on fire, but it has been steady cash to bank each year. In addition, the future looks bright when considering the National Grid dividend forecast.

Where we stand at the moment

The business announces two dividends during the year. This ties in with the half-year and full-year results (usually in May and November). Therefore, when I assess the current dividend yield, I use the dividend per share figure from May and November 2022. This totals 51.6p (the sum of 17.84p and 33.76p).

Based on the current share price of 1,061p, it gives me a yield of 4.86%. By comparison, the FTSE 100 average yield is 3.86%. If I owned the stock at the moment, I’d be comfortably above the average.

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I do have to account for share price movements as well. Over the past year, the stock has fallen by 5.45%. This is a risk with dividend investing, in that my capital loss can offset the gains made from the income received. As a long-term investor, I aim to reduce this risk by holding stocks for a considerable period.

Rising yield

Next up will be full-year results in May. The dividend forecast is 35.5p, with 19.7p later in the year, totalling 55.2p for 2023. This is a jump from 2022, and if realised, could offer a juicy yield for me.

Although it’s impossible to know my exact yield until I lock in the share price, if the stock was at the same price, my yield would be 5.2%.

For 2024, analysts are forecasting a total year payment of 58p. This could increase the yield to 5.46%.

From my perspective, the increase in dividend payments isn’t unrealistic. In the last financial year, it had an operating profit margin of 24.6% and a net profit margin of 14.1%. This bodes well for paying out cash to shareholders, as it mostly comes from the profit from latest earnings.

How the stock could work for me

I understand that for some people, the numbers on offer aren’t exciting enough. Yet I go back to my original point, focused on sustainability. I’d much rather own a stock with a good track record of paying than invest in a high-yield idea that could cut the payment in the near future.

In order to try and get the best of both worlds, I’m considering buying National Grid shares to help diversify my portfolio. Let’s assume I hold one stock with a yield of 7%. If I add National Grid with a yield of 5%, I lower my risk by holding two stocks and get a blended yield of 6%. This is how I see the company fitting in to my investment pot in the future.

Created with Highcharts 11.4.3National Grid Plc PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

Should you invest £1,000 in Polymetal right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool 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 Polymetal made the list?

See the 6 stocks

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Jon Smith has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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