National Grid (NYSE:NGG) Barclays Top Pick of European Regulated Utilities for 2011

National Grid (NYSE:NGG) is among the fastest growing utilities, including the U.S. and Europe, and provides solid protection in a volatile macro-economic environment.

Barclays says, "National Grid is our top pick of the European Regulated Utilities for 2011 as it provides value, dividends, growth, and protection from macro variables. The company is set to grow at the highest pace of the European Utilities and is among the highest growers of US regulated utilities. The shares currently yield approximately 7%, a 220bp premium to the average US regulated utility yield of 4.8%. We are not overly concerned about regulatory changes in the UK as we believe future requirements for transmission infrastructure will justify a generous incentive system.

"Our earnings estimates move from $3.85/$4.06/$4.19E to $3.85/$3.92/$4.18E for FY March end '11/12/13 respectively."

Barclays reiterates an "Overweight" rating on National Grid (NGG), which closed Thursday at $43.56, up $0.54, or 1.26 percent. Barclays lowered their price target on National Grid from from $50 to $49.

ITC Holding (NYSE:ITC), National Grid (NYSE:NGG) DTE (NYSE:DTE), NV Energy (NYSE:NVE), NextEra Energy (NYSE:NEE), AES (NYSE:AES) Favorites of Barclays

Barclays (NYSE:BCS) said in a note they aren't as bullish on the regulated energy sector as they had been in 2010, and picked companies like ITC Holding (NYSE:ITC), National Grid (NYSE:NGG) DTE (NYSE:DTE) and NV Energy (NYSE:NVE), based on transmission exposure.

In the power sector, they like firms like NextEra Energy (NYSE:NEE) and AES Corp (NYSE:AES). because of not having to rely on a natural gas recovery to propel them.

Barclays said, "We enter 2011 with less conviction in our positive regulated utility/negative power view than last year. The palpable return of risk appetite among investors due to recent improvements in economic trends is responsible. While we are not reversing our stance, we are taking steps to narrow our focus. On the regulated side, we are highlighting securities that have higher growth potential due to transmission exposure (ITC Holding and National Grid or economic sensitivity due to geography and NV Energy. In Power, we like stocks that have opportunities that are tied to an economic acceleration, but are not dependant on natural gas price recovery and AES Corp.)

ITC Holding was trading at $62.33, gaining $0.35, or 0.56 percent, as of 1:47 PM EST. National Grid was trading at $44.44 0.06, up 0.14 percent. DTE Energy was trading at $45.60, up $0.28, or 0.62 percent. NV Energy was at $14.07, up $0.02, or 0.14 percent. NextEra Energy was at $52.26, up $0.27, or 0.52 percent. AES was trading at $12.62, gaining $0.44, or 3.65 percent.