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NiSource (NI) to Benefit From Investments & Clean Assets
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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. Addition of clean assets in generation portfolio is expected to further drive its performance.
However, this Zacks Rank #2 (Buy) stock has to face risks related to delay in the completion of capital projects.
Tailwinds
NI is working on a long-term utility infrastructure modernization program. It made capital investments worth $1.9 billion in 2021. The company invested $2.6 billion in 2022 and expects to invest $3.3-$3.6 billion in 2023. NiSource projects an investment of approximately $15 billion during 2023-2027, including capital investments to support generation transition strategy.
The company has a 100% regulated utility business model. NI’s planned investments will improve the reliability and safety of its services, and provide efficient electric and natural gas services to its increasing customer base. More than 75% of its capital expenditure starts delivering returns in less than 18 months of investment.
Headwinds
Risks related to any delay in the completion of capital projects, interest rate increases and the failure of aging infrastructure are potential headwinds for the company. Despite efforts made by NiSource to maintain its assets through inspection and scheduled maintenance, the old machineries are likely to falter, resulting in unplanned outages. These, in turn, are likely to have an adverse impact on the company’s operation, impacting its utility revenues and margins.
IDACORP’s long-term (three to five year) earnings growth rate is pinned at 3.68%. It delivered an average earnings surprise of 4.6% in the last four quarters.
OGE Energy’s long-term earnings growth rate is pegged at 17.89%. It delivered an average earnings surprise of 19.92% in the previous four quarters.
NRG Energy’s long-term earnings growth rate is pinned at 6.5%. The Zacks Consensus Estimate for NRG’s 2023 earnings per share indicates an increase of 140.84%.
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NiSource (NI) to Benefit From Investments & Clean Assets
NiSource Inc’s (NI - Free Report) investment in modernizing infrastructure will further enhance the reliability of its natural gas and electric operations. Addition of clean assets in generation portfolio is expected to further drive its performance.
However, this Zacks Rank #2 (Buy) stock has to face risks related to delay in the completion of capital projects.
Tailwinds
NI is working on a long-term utility infrastructure modernization program. It made capital investments worth $1.9 billion in 2021. The company invested $2.6 billion in 2022 and expects to invest $3.3-$3.6 billion in 2023. NiSource projects an investment of approximately $15 billion during 2023-2027, including capital investments to support generation transition strategy.
The company has a 100% regulated utility business model. NI’s planned investments will improve the reliability and safety of its services, and provide efficient electric and natural gas services to its increasing customer base. More than 75% of its capital expenditure starts delivering returns in less than 18 months of investment.
Headwinds
Risks related to any delay in the completion of capital projects, interest rate increases and the failure of aging infrastructure are potential headwinds for the company. Despite efforts made by NiSource to maintain its assets through inspection and scheduled maintenance, the old machineries are likely to falter, resulting in unplanned outages. These, in turn, are likely to have an adverse impact on the company’s operation, impacting its utility revenues and margins.
Other Stocks to Consider
Some other top-ranked stocks from the same industry are IDACORP, Inc (IDA - Free Report) and OGE Energy Corp. (OGE - Free Report) , both carrying a Zacks Rank #2, and NRG Energy, Inc. (NRG - Free Report) , sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
IDACORP’s long-term (three to five year) earnings growth rate is pinned at 3.68%. It delivered an average earnings surprise of 4.6% in the last four quarters.
OGE Energy’s long-term earnings growth rate is pegged at 17.89%. It delivered an average earnings surprise of 19.92% in the previous four quarters.
NRG Energy’s long-term earnings growth rate is pinned at 6.5%. The Zacks Consensus Estimate for NRG’s 2023 earnings per share indicates an increase of 140.84%.