National Grid, one of our steadiest, biggest yield generators, is making moves to ensure its dividends stay fat and growing. Just this week it announced it’s putting a majority stake of Britain’s $12.8 billion natural gas system, which it owns, up for sale. The utility company is looking to invest the proceeds in faster-growing businesses, including in the United States, where it already owns regulated electric and gas utilities, the main engines behind the company’s growth.

National Grid (NYSE: NGG) owns the wires and pipelines that transmit electricity and gas. Governments understand the importance of electrical infrastructure and support it by granting rate hikes for maintenance, improvements and expansion.

This means a stable, long-term business for a company like National Grid. It owns and operates the high-voltage electricity transmission system across the United Kingdom and electricity transmission systems in the northeastern United States. With a market capitalization of about $51 billion, National Grid is even bigger than America’s biggest utility, Duke Energy.

The company is expected to keep its policy of raising its ordinary dividend at least in line with the retail price index’s rate of inflation, which currently stands about 2% to 3%. This means steady income growth for the company’s American depository receipt (ADR), currently yielding 4.84%.

National Grid isn’t a utility that generates power. It doesn’t own or operate any electricity generation in the United Kingdom, where about 65% of its business is, but rather generates revenue as one of the world’s largest owners of wires that deliver electricity to U.K. customers. This leaves the company free from the volatility of gas, coal and oil prices, ensuring that its earnings are anchored to the increasing demand for electricity.

And with recent news of multiple plant breakdowns in the U.K., the need to maintain infrastructure becomes more important to guard against the risk of blackouts.

Pay for Performance

If National Grid performs well, its profits rise and so do the returns to its shareholders. This is because U.K. regulators allow National Grid to earn more than its allowed return if the network utility meets certain performance benchmarks. The firm has received around $40 billion in investment allowance for essential infrastructure over eight years.

About 35% of National Grid’s assets are located in the United States, where it operates a regulated business with 100% pass-through in all of its contracts, meaning it’s protected from commodity price fluctuations by passing the costs on to its customers.

The company owns 50 fossil-fuel-powered stations on Long Island as well as solar generation and another 4,000 megawatts of contracted electricity power generation in Massachusetts. Along with its subsidiary, Niagara Mohawk, based in upstate New York, National Grid serves 3.4 million electricity customers in Massachusetts, New York and Rhode Island.

The company is also the biggest natural gas distributor in the Northeast, serving roughly 3.6 million customers in the same three states. National Grid benefits from the low price and abundance of U.S. natural gas as the company expands its network to meet new demand. If natural gas prices reverse as a result of inflation, National Grid’s management has said this would not affect plans to expand its network.

National Grid offers a stable and growing yield with diversification—65% of its operations are in the U.K. and 35% in the United States—in two of the world’s strongest economies, making it a strong Global Income Edge holding.

Management doesn’t make predictions about where energy will come from in the future but instead focuses on the flexibility needed to provide it to customers. This means building out its infrastructure to support unforeseen demand, investing a total of $5.3 billion in essential infrastructure in fiscal 2014–2015. These investments will add to long-term growth.

Last year, National Grid boosted its investments to its U.K. networks 15.7% to $322 million. And in the United States, where management said it would concentrate most of its growth efforts, the company invested $2.4 billion in its network to improve its gas assets.

This led to an underlying U.S. rate-base growth of 7% to $17.2 billion during the fiscal year, higher than its 5% growth rate the prior year and long-term target growth rate of 5%. That rate-base growth also helped boost the company’s total return on equity of 11.8% for fiscal 2014–2015, compared to 11.4% in fiscal 2013–2014.

National Grid CEO Steve Holliday recently announced he would retire March 31, 2016—the end of the fiscal year. But expect the company’s long-term strategy to remain intact. The new CEO, John Pettigrew, is a product of the company’s principles, having spent his entire 25-year professional career with National Grid. Before he was selected as National Grid’s next CEO, Mr. Pettigrew served on its board as executive director of its U.K. operations and has served as COO of its U.S. operations. Buy National Grid up to $74 for its stability and growing dividend.