National Network (LSE: NG.) rocked the investing world in slow May, with its share price plummeting.

Typically grumpy with little happening between dividend payments, the energy grid company has just shaken off some of the cobwebs.

This is a fresh issue of shares to raise funds for future development. This means dilution, with dividend rebasing. And seven shares out of every 24 that shareholders currently own are valued at just 645p.

Price loser

Grid shares fell 15% from their closing price the day before the shocking news. What does all this mean for passive income investors? Does it knock the stock off its pedestal as a stock bought for its dividend and then simply forgotten about for decades?

No, I think they did just the opposite. I believe that the market, as usual, overreacted. And National Grid looks like an even better long-term dividend stock to me right now.

What can you earn in terms of passive income?

Dividend forecasts

With the share price falling, the dividend yield still looks good. Analysts predict a decline in 2025, but still expect a yield of 5.3%. They believe that next year it will raise to 5.7%.

If the fresh cash injection helps the company grow faster in response to changing renewable energy needs, I think we could see better long-term annual cash growth.

There must also be a good chance of the share price rising, especially once the dust settles and the situation becomes clearer.

But even if it only gains 2% per year, based on the 2025 forecast, that could still mean a total return of 7.3% per year – ignoring any subsequent increases.

Passive income pool

I would never invest all my money in one stock. No, that would be crazy, even for a case where I see long-term security such as a national grid.

So if I buy some it will be part of a diversified Stocks and Shares ISA. I also see plenty of other dividend stocks worth adding.

But just for fun, what could someone achieve by investing £10,000 in National Grid shares every year? If they buy fresh dividend shares they could reach a pot of £440,000 within 20 years.

Or over a million in 30 years. The last decade would be worth more than the first two! This is how the magic of connection works.

Danger too

The fresh direction National Grid plans to take will likely involve greater risk. I see the share price being a bit choppy for a while.

What I really see is that the stock has been trading at a low price-to-earnings (P/E) valuation for the last few years. Such a change could have this impact on the stock.

Still, I think National Grid may be the best long-term passive income stock I’ve never bought. I really should do something about this.