NG., CNA, SSE: FTSE 100 energy stocks to add to watchlist

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 NG., CNA, SSE: FTSE 100 energy stocks to add to watchlist
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  • Average domestic electricity bills are set to increase to £4,279 from January, Ofgem has said.
  • However, households will not have to pay that much as they are protected by the government's energy price guarantee scheme.

Energy bills are already troubling millions of British households as the new energy price cap has pushed the average domestic bill to about £2,500 per year starting October from £1,971 a year earlier. According to UK's energy regulator Ofgem, the bills will reach £4,279 from January, which is a rise of 21% due to the new energy price cap. The cap is revised every quarter.

However, households will not have to pay this much as the government's support scheme has superseded the energy price cap. Called the energy price guarantee, the scheme limits the average bills to £2,500 annually and will remain in effect until March 2023.

In last week's autumn statement, chancellor Jeremy Hunt said that the scheme will be lifted after the first quarter of 2023, taking the average bills from April 2023 to £3,000 for a typical household.

The support scheme came as a part of the government's efforts to provide some relief from the cost-of-living crisis for Brits to some extent. Energy bills have been rising since early this year after Russia's invasion of Ukraine led to energy supply chain issues. Thus, the cost of gas has increased, forcing the energy suppliers to raise their prices for a unit of electricity.

Ofgem's latest remarks also came as the UK is projected to slip into a recession, which would be the longest since the records began about a century ago.

Amid the latest projections on energy bills, let's explore some energy stocks on the London Stock Exchange.

National Grid Plc (LON NG.)

The FTSE 100 listed energy supplier has reaped bumper profits this year due to soaring energy bills. It recently announced its results for the half year to 30 September 2022, posting a 45% rise in pre-tax profits. The company at present holds a market cap of £37,773.81 million, and its EPS (earnings per share) stand at 0.65 as of 24 November. The 12-month return to shareholders isn't huge and currently stands at 2.18%. On the other hand, the year-to-date (YTD) return is in the red at -4.32%.

Centrica Plc (LON: CNA)

Centrica is a leading energy utility company in the UK. Its stock has jumped by 42.87% to investors over the past year. The FTSE 100 constituent holds a market cap of £5,589.52 million and an EPS of 0.21 as of 24 November.


SSE is another leading energy supplier in the UK. The company recently announced that it would pay a higher dividend to its shareholders compared to last year. Holding a market cap of £18,601.24 million, the supplier belongs to the FTSE 100 index, and its EPS is at 2.87 as of 24 November. Its one-year and YTD returns are presently at 9.29% and 6.05%, respectively.

Note: The above content constitutes a very preliminary observation or view based on market trends and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.


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