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NiSource's (NI) Focus on Clean Energy, Investments Bode Well
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NiSource Inc.’s (NI - Free Report) ongoing investments in strengthening its existing infrastructure and focus on clean energy are going to boost its performance. Also, its strong liquidity position acts as a tailwind.
The company’s long-term (three to five years) earnings growth is pegged at 6.22%.
What’s Driving the Stock?
NiSource is working on its long-term utility infrastructure modernization program. Over the 2021-2024 time frame, the company is going to invest in the range of $9.5-$10.6 billion. The utility has a 100% regulated business model. More than 75% of NiSource’s capital expenditure starts providing returns in less than 18 months of investment. This will drive its earnings per share, witnessing a 7-9% CAGR in the 2021-2024 time frame.
Also, the company aims to reduce its greenhouse gas emissions by 90% within 2030 from its 2005 baseline and save more than $4 billion for customers of more than 30 years. The utility is planning to retire its 100% coal-generating sources by 2028 to replace the same with reliable and cleaner options at lower costs. Notably, NiSource through joint ventures and PPA agreement is scheduled to add nearly 1,030 MW of clean generation to its existing portfolio by 2023 end.
In addition to NiSource, utilities like Duke Energy (DUK - Free Report) , DTE Energy (DTE - Free Report) and Xcel Energy (XEL - Free Report) among others are undertaking measures to supply clean energy.
Through cost-saving initiatives, the utility is expecting to reduce operating and maintenance (O&M) expenses by nearly 8% in 2021 from the 2020 level. The cost-control efforts are expected to keep O&M expenses relatively flat in the 2011-2024 time frame. At the end of 2020, the company had $1.7 billion liquidity available and $2.1 billion of committed facilities, which are adequate to meet debt obligations.
Headwinds
However, the utility is exposed to variability in cash flows associated with volatility in natural gas prices, which acts as an overhang on the stock. Also, despite efforts made to maintain its assets, the old machineries may turn defunct, causing unplanned outages and adversely impacting the company’s operations.
Price Performance
In the past month, shares of NiSource have lost 2% compared with the industry's decline of 6%.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
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NiSource's (NI) Focus on Clean Energy, Investments Bode Well
NiSource Inc.’s (NI - Free Report) ongoing investments in strengthening its existing infrastructure and focus on clean energy are going to boost its performance. Also, its strong liquidity position acts as a tailwind.
We issued an updated research report on this currently Zacks Rank #3 (Hold) company. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The company’s long-term (three to five years) earnings growth is pegged at 6.22%.
What’s Driving the Stock?
NiSource is working on its long-term utility infrastructure modernization program. Over the 2021-2024 time frame, the company is going to invest in the range of $9.5-$10.6 billion. The utility has a 100% regulated business model. More than 75% of NiSource’s capital expenditure starts providing returns in less than 18 months of investment. This will drive its earnings per share, witnessing a 7-9% CAGR in the 2021-2024 time frame.
Also, the company aims to reduce its greenhouse gas emissions by 90% within 2030 from its 2005 baseline and save more than $4 billion for customers of more than 30 years. The utility is planning to retire its 100% coal-generating sources by 2028 to replace the same with reliable and cleaner options at lower costs. Notably, NiSource through joint ventures and PPA agreement is scheduled to add nearly 1,030 MW of clean generation to its existing portfolio by 2023 end.
In addition to NiSource, utilities like Duke Energy (DUK - Free Report) , DTE Energy (DTE - Free Report) and Xcel Energy (XEL - Free Report) among others are undertaking measures to supply clean energy.
Through cost-saving initiatives, the utility is expecting to reduce operating and maintenance (O&M) expenses by nearly 8% in 2021 from the 2020 level. The cost-control efforts are expected to keep O&M expenses relatively flat in the 2011-2024 time frame. At the end of 2020, the company had $1.7 billion liquidity available and $2.1 billion of committed facilities, which are adequate to meet debt obligations.
Headwinds
However, the utility is exposed to variability in cash flows associated with volatility in natural gas prices, which acts as an overhang on the stock. Also, despite efforts made to maintain its assets, the old machineries may turn defunct, causing unplanned outages and adversely impacting the company’s operations.
Price Performance
In the past month, shares of NiSource have lost 2% compared with the industry's decline of 6%.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
See the 5 high-tech stocks now>>