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NiSource (NI) to Gain From Investments, Renewable Projects
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NiSource Inc’s (NI - Free Report) investment in modernizing infrastructure will further enhance the reliability of its natural gas and electric operations. NiSource’s stable return from regulated assets and focus on clean energy are likely to boost its earnings performance.
However, this Zacks Rank #2 (Buy) stock has to face risks of aging infrastructure that needs regular replacement.
Tailwinds
NiSource is working on a long-term utility infrastructure modernization program and has an estimated $15 billion in natural gas and electric infrastructure investment opportunities, which are expected to drive earnings. The company’s planned regulated investments will improve the reliability and safety of its electric and natural gas services provided to its expanding customer base. It has $2 billion of planned renewable investment through 2023.
NiSource is also expected to benefit from its cost saving initiatives, which would result in decreased operation and maintenance expenses. The company had $1.6 billion net liquidity available as of Dec 31, 2022, which is adequate to meet its debt obligations. It does not have any significant long-term debt obligations until 2024.
Due to the delay in solar generation projects, the company now expects to retire Schahfer Generating Station’s remaining two coal units by the end of 2025. It is also set to retire its 100% coal-generating sources between 2026 and 2028, and replace the production volumes with reliable and cleaner options at lower costs. NiSource aims to reduce greenhouse gas emissions by 90% within 2030 from 2005 levels.
The company’s board of directors declared a new quarterly dividend of 25 cents per share, making NiSource an attractive option for investors. This represented an annualized dividend of $1 per share, up 6.4% from 94 cents in 2022.
Headwinds
NiSource’s risks related to any delay in the completion of capital projects, interest rate increases and the failure of aging infrastructure are headwinds. Despite efforts made by NiSource to properly maintain its assets through inspection, scheduled maintenance and capital investment, the old machineries can falter, resulting in unplanned outages.
The Zacks Consensus Estimate for Ameren Corporation, Unitil Corporation and MGE Energy’s 2023 earnings per share (EPS) indicates an increase of 5.1%, 7.34% and 14.01%, respectively.
Long-term (three- to five-year) earnings growth of Ameren Corporation, Unitil Corporation and MGE Energy is pegged at 6.86%, 7.08% and 4.22%, respectively.
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NiSource (NI) to Gain From Investments, Renewable Projects
NiSource Inc’s (NI - Free Report) investment in modernizing infrastructure will further enhance the reliability of its natural gas and electric operations. NiSource’s stable return from regulated assets and focus on clean energy are likely to boost its earnings performance.
However, this Zacks Rank #2 (Buy) stock has to face risks of aging infrastructure that needs regular replacement.
Tailwinds
NiSource is working on a long-term utility infrastructure modernization program and has an estimated $15 billion in natural gas and electric infrastructure investment opportunities, which are expected to drive earnings. The company’s planned regulated investments will improve the reliability and safety of its electric and natural gas services provided to its expanding customer base. It has $2 billion of planned renewable investment through 2023.
NiSource is also expected to benefit from its cost saving initiatives, which would result in decreased operation and maintenance expenses. The company had $1.6 billion net liquidity available as of Dec 31, 2022, which is adequate to meet its debt obligations. It does not have any significant long-term debt obligations until 2024.
Due to the delay in solar generation projects, the company now expects to retire Schahfer Generating Station’s remaining two coal units by the end of 2025. It is also set to retire its 100% coal-generating sources between 2026 and 2028, and replace the production volumes with reliable and cleaner options at lower costs. NiSource aims to reduce greenhouse gas emissions by 90% within 2030 from 2005 levels.
The company’s board of directors declared a new quarterly dividend of 25 cents per share, making NiSource an attractive option for investors. This represented an annualized dividend of $1 per share, up 6.4% from 94 cents in 2022.
Headwinds
NiSource’s risks related to any delay in the completion of capital projects, interest rate increases and the failure of aging infrastructure are headwinds. Despite efforts made by NiSource to properly maintain its assets through inspection, scheduled maintenance and capital investment, the old machineries can falter, resulting in unplanned outages.
Other Stocks to Consider
Some other top-ranked stocks from the same industry are Ameren Corporation (AEE - Free Report) , Unitil Corporation (UTL - Free Report) and MGE Energy, Inc. (MGEE - Free Report) , each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Ameren Corporation, Unitil Corporation and MGE Energy’s 2023 earnings per share (EPS) indicates an increase of 5.1%, 7.34% and 14.01%, respectively.
Long-term (three- to five-year) earnings growth of Ameren Corporation, Unitil Corporation and MGE Energy is pegged at 6.86%, 7.08% and 4.22%, respectively.