National Network (LSE:NG.) shares have continued to enjoy popularity among UK investors. With reliable cash flows, high dividend payments and monopoly power over the electricity network, it is easy to see why this business is a FTSE100 Favorite.

But with National Grid’s share price just a few percentage points away from an all-time high, I wonder if this blue-chip stock is still a good buy right now.

Let’s look at today’s investment case.

A turbulent year

National Grid shares are often praised for their stability, but 2024 was an unusually volatile year. The main event was a £7 billion rights issue capital raising in May, which triggered a sharp decline in the share price.

Naturally, many shareholders were concerned about dividend dilution and rising capital costs. The company plans to increase its capital investment in the UK and US to £60 billion within five years.

In addition, the company ended the 2024 financial year with net debt of £43.6 billion. National Grid enjoys a high level of regulatory protection that protects it from some of the risks faced by other highly indebted companies. Still, its balance sheet is not exactly rosy.

However, we must not forget that the last major rights issue on the UK stock exchange was Rolls Royce during its pandemic struggles in 2020. Since then, the engineering giant’s share price has experienced explosive growth.

In fact, National Grid shares have already recovered almost all of the losses they suffered during the May capital raising.

Dividend stability

One effect of the 29% share count increase is the recalculation of National Grid’s dividend payouts. This is potentially concerning for investors, as high payouts are central to the stock’s long-term appeal, especially for retirees seeking regular passive income.

However, the impressive dividend history cannot be overlooked. The stock has consistently returned between 4% and 6% over the past ten years. The board’s goal is to increase dividends in line with CPIH inflation in the future, and the current yield is an attractive 5.5%.

However, it must also be acknowledged that the highly regulated environment in which National Grid operates poses risks to the sustainability of the dividend. Ofgem exerts a significant influence on the company’s profit potential.

Ultimately, regulatory decisions could cap future share price growth and dividend payouts. A final framework decision for the next price control period – April 2026 to March 2031 – will not be made until the end of next year.

Growth prospects

Although National Grid’s share price is near a 52-week high, I think it still offers good value for money. A price-to-earnings (P/E) ratio of 14.7 seems reasonable, which bodes well for future earnings.

A key benefit of the rights issue is the additional flexibility it provides to focus on long-term growth opportunities. National Grid expects to grow group assets by 10% per year through to 2029. If this is achieved, the company would have group assets of £100 billion at the end of the period.

Ultimately, the energy giant seems well positioned to benefit from the energy transition. Granted, there are many potential pitfalls in implementing major infrastructure improvements and regulatory risks to keep an eye on. But overall, I would happily buy National Grid shares if I had money to spare to invest.