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Highlights
- UK officials introduced a new super tax in order to dissuade energy companies from going for gas profiteering before letting their firms collapse.
- The new super tax will levy a tax of 75 per cent on the future windfall from energy company shareholders.
UK treasury officials introduced a new super tax to dissuade energy company heads from making hefty profits from their attractive gas contracts before letting their firms collapse.
The tax, called the public interest business protection tax, will be levied 75 per cent to an energy firm’s shareholders’ future windfall. The new tax move comes amid fears that Ovo Energy’s Stephen Fitzpatrick might liquidate a long-term gas contract and leave the market after making a tidy profit.
However, Ovo Energy has supported the move, adding that it has been apparent for a while that some actions were required to help protect British taxpayers and households.
The consumers located in England, Wales, and Scotland will likely have to pay around £3.2 billion in order to manage the costs associated with finding new energy suppliers for about 2 million households impacted by several energy providers going bust since September 2021. And around 1.7 million Bulb Energy’s customers, which went into administration lately.
Amid this development, let us take a closer look at 2 FTSE 100 index listed energy stocks and explore their investment prospects:
- National Grid PLC (LON: NG.)
National Grid is an energy and gas company.
The company forecasts its compound annual growth rate (CAGR) underlying earnings per share (EPS) to be in the higher end of the 5 to 7 per cent range between 2020/21 to 2025/26, according to the company’s half-year results statement
The company also added that it estimates its full-year underlying EPS to be much higher than the top end of its 5 to 7 per cent range.
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The company’s shares were trading at GBX 1,100.20, up by 1.91 per cent on 1 February at 10:41 AM BST. The FTSE 100 index, on the other hand, was at 7,520.53, up by 0.75 per cent.
The company’s market cap was at £39,350.45 million, and it has a one year return of 29.27 per cent, as of 1 February 2022.
- SSE PLC (LON: SSE)
SSE is a multinational energy company.
SSEN Transmission, which is part of SSE Group, has welcomed this year’s Networks Options Assessment (NOA) release, which issued a £5 billion investment recommendation into electricity transmission infrastructure in the north of Scotland.
This will be a key method for meeting the UK and Scotland’s net-zero goals. SSEN is the electricity transmission owner for the north of Scotland.
Image source: EODHD/Others
The company’s shares were trading at GBX 1,608.00, up by 1.61 per cent on 1 February at 11:09 AM BST. The company’s market cap was at £ 16,866.78 million, and it has a one-year return of 8.39 per cent, as of 1 February 2022.
