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National Grid Lifts Dividend to Yield 5.9%

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LONDON -- The shares of National Grid (LSE: NG.L  ) (NYSE: NGG  ) slipped 0.4% to 691 pence during London trade today, offering dividend investors a potential 5.9% income.

The FTSE 100 member confirmed this morning that its half-year payout had been raised 4% to 14.49 pence per share. The electricity and gas company also said the payout for the year as a whole ought to be lifted by 4% as well. The news implied shareholders should expect to receive a current-year dividend of 40.85 pence per share.

The dividend details came alongside first-half results that showed National Grid's headline profit improve 17% to 1.7 billion pounds. However, adjusted for currency movements, regulatory revenue caps, and the costs of storm damage, underlying profit advanced 7% to 1.6 billion pounds.

Steve Holliday, National Grid's chief executive, said: "I am pleased with the progress we made in the first half of the year: operating our networks safely and reliably and delivering a record level of investment. More recently, our teams in the U.S. responded in a timely, safe and effective way to restore service to our customers and limit disruption caused by 'Superstorm' Sandy."

Holliday claimed the cost of restoring power to the group's U.S. customers following Sandy would not exceed 100 million pounds. Such costs will be accounted for within the group's second half. Looking ahead, Holliday reckons National Grid is "well positioned to deliver another year of good operating and financial performance."

Prior to today, City experts were predicting that fiscal 2013 earnings would advance 7% to 55 pence per share. The projection places National Grid's shares on a possible P/E of 12.5. But for most investors, it is the aforementioned 5.9% income that is the main attraction to this share.

Indeed, National Grid is just one of a number of FTSE large caps that currently offers a dividend income well ahead of what you can expect to receive from a standard savings account. If you are seeking other high-dividend possibilities, this exclusive free report could assist your investment decisions. The report reveals the favorite income stocks held by Neil Woodford -- the City fund manager who has thrashed the FTSE 100 by favoring dividend-paying blue chips. To receive all these Neil Woodford large-cap ideas today -- and to learn the investing logic behind them -- just click here.

Maynard does not own any share mentioned in this article. Motley Fool newsletter services have recommended buying shares of National Grid. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

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National Grid CAPS Rating: ****