The past month has seen a lot of volatility in the stock market as well as the energy markets. But with its monopoly status in some businesses, regulated pricing, and commitment to raising its dividend per share in line with a leading measure of inflation (or faster), could National Grid (LSE: NG) be a potential safe haven in my portfolio at the moment?

A dividend policy that’s clashed with business reality

In my opinion at least, the answer is no.

I have no plans to buy the share and do not regard National Grid dividends as having a safe haven.

Although the company’s policy is to grow its dividend per share annually, in practice no shareholder payout is ever guaranteed at any company. Indeed, just last year, National Grid sliced a fifth off its dividend per share.

That was not some anomalous oversight, in my view. The company has a large network that needs to be updated as well as adapted to meet changing power generation and consumption patterns. That is costly: National Grid is expending billions of pounds each year on it.

But the company makes a lot of money, you may say, so surely it can afford it?

Yes, National Grid does make a lot of money – but funding the dividend is expensive. Last year, the FTSE 100 company spent £1.5bn on it. That is on top of other sizeable expenditure requirements.

Net debt has been growing and stands at over £40bn.

So, although National Grid aims to keep growing its dividend per share annually, I see a risk that that ambition could again be thwarted at some point due to the company’s high capital expenditure requirements.

I see a lot to like here

Still, even accepting the risk of a dividend cut, could there still be a reason for me to invest here?

After all, with its yield of 3.8%, the share remains substantially more lucrative from a passive income perspective than the FTSE 100. It currently offers a yield of 3%.

Those numbers might not sound significantly different. But they mean that £10,000 invested in National Grid (as part of a diversified portfolio) ought to earn £80 a year more than the same amount put into the FTSE 100.

Plus, National Grid shares are up 55% in five years. That beats the 47% growth in the FTSE 100 seen over the equivalent period.

Again, like the dividend cut, I do not see that as inexplicable.

National Grid has a massive competitive advantage in an industry likely to benefit from long-term demand in coming decades. At the right price, that alone would make me consider buying this share.

Here’s my move

The thing is, I do not think the current price is the right one for me.

At 21 times earnings, the price looks expensive to my eyes.

When investing, I like a margin of safety. I am not comfortable that I would have one at the current National Grid share price, given the company’s net debt and ongoing capital expenditure requirements.

So, for now, I will not be investing.