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Reasons to Add NiSource (NI) to Your Portfolio Right Now
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NiSource Inc. (NI - Free Report) is a utility company that provides natural gas and electricity services in the United States. The company focuses on providing safe, reliable and clean energy through consistent investments in infrastructure.
Let’s explore the factors that make this Zacks Rank #2 (Buy) stock a strong investment pick at the moment.
Growth Projections
The Zacks Consensus Estimate for NI’s 2023 and 2024 earnings is pegged at $1.59 and $1.71 per share, respectively, increasing 1.3% and 1.8%, respectively, in the past 60 days.
The company’s long-term (three- to five-year) earnings growth is pegged at 7%.
Return on Equity (ROE)
ROE indicates how efficiently a company utilizes its funds to generate higher returns. NI’s ROE is currently pegged at 10.90%, higher than the industry’s average of 9.83%, which indicates that the company is utilizing its funds more efficiently than its peers.
Debt Position & Liquidity
NiSource’s times interest earned ratio at the end of second-quarter 2023 was 3.05. The ratio, being greater than one, substantiates Ni Source’s ability to meet future debt obligations without difficulties.
The company had $1.8 billion net liquidity available as of Jun 30, 2023, which is adequate to meet its debt obligations.
Dividend History
The company has been consistently paying dividends to its shareholders. NiSource raised its dividend in February 2023, taking the quarterly figure to 25 cents, resulting in an annual payout of $1 per share. This indicates 6.4% growth from 2022.
The company has increased its dividend five times in the past five years. NI’s current dividend yield is 3.77%, better than the industry’s average of 3.62%.
Strong Long-term Growth Plan
NiSource continues to follow a systematic capital investment plan for infrastructure development. The company has a robust capital expenditure plan of $15 billion for the 2023-2027 period. In the next 10 years, the company plans to invest $30 billion. With NiSource’s planned capital expenditures and timely rate revisions from regulatory authorities, the company’s rate base is projected to expand, witnessing an annual growth of 8-10% in 2023-2027.
Price Performance
In the past six months, shares of NI have lost 3.9% compared with the industry’s 7.5% decline.
ED’s long-term earnings growth rate is 2%. The Zacks Consensus Estimate for 2023 EPS is pegged at $4.86, implying a year-over-year improvement of 6.8%.
ETR’s long-term earnings growth rate is 5.7%. The Zacks Consensus Estimate for 2023 EPS is pegged at $6.69, implying a year-over-year improvement of 4.2%.
NEE’s long-term earnings growth rate is 8.4%. The Zacks Consensus Estimate for 2023 EPS is pegged at $3.11, implying a year-over-year improvement of 7.2%.
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Reasons to Add NiSource (NI) to Your Portfolio Right Now
NiSource Inc. (NI - Free Report) is a utility company that provides natural gas and electricity services in the United States. The company focuses on providing safe, reliable and clean energy through consistent investments in infrastructure.
Let’s explore the factors that make this Zacks Rank #2 (Buy) stock a strong investment pick at the moment.
Growth Projections
The Zacks Consensus Estimate for NI’s 2023 and 2024 earnings is pegged at $1.59 and $1.71 per share, respectively, increasing 1.3% and 1.8%, respectively, in the past 60 days.
The company’s long-term (three- to five-year) earnings growth is pegged at 7%.
Return on Equity (ROE)
ROE indicates how efficiently a company utilizes its funds to generate higher returns. NI’s ROE is currently pegged at 10.90%, higher than the industry’s average of 9.83%, which indicates that the company is utilizing its funds more efficiently than its peers.
Debt Position & Liquidity
NiSource’s times interest earned ratio at the end of second-quarter 2023 was 3.05. The ratio, being greater than one, substantiates Ni Source’s ability to meet future debt obligations without difficulties.
The company had $1.8 billion net liquidity available as of Jun 30, 2023, which is adequate to meet its debt obligations.
Dividend History
The company has been consistently paying dividends to its shareholders. NiSource raised its dividend in February 2023, taking the quarterly figure to 25 cents, resulting in an annual payout of $1 per share. This indicates 6.4% growth from 2022.
The company has increased its dividend five times in the past five years. NI’s current dividend yield is 3.77%, better than the industry’s average of 3.62%.
Strong Long-term Growth Plan
NiSource continues to follow a systematic capital investment plan for infrastructure development. The company has a robust capital expenditure plan of $15 billion for the 2023-2027 period. In the next 10 years, the company plans to invest $30 billion. With NiSource’s planned capital expenditures and timely rate revisions from regulatory authorities, the company’s rate base is projected to expand, witnessing an annual growth of 8-10% in 2023-2027.
Price Performance
In the past six months, shares of NI have lost 3.9% compared with the industry’s 7.5% decline.
Image Source: Zacks Investment Research
Other Stocks to Consider
A few other top-ranked stocks in the same industry are Consolidated Edison Inc. (ED - Free Report) , Entergy Corp. (ETR - Free Report) and NextEra Energy Inc. (NEE - Free Report) , each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
ED’s long-term earnings growth rate is 2%. The Zacks Consensus Estimate for 2023 EPS is pegged at $4.86, implying a year-over-year improvement of 6.8%.
ETR’s long-term earnings growth rate is 5.7%. The Zacks Consensus Estimate for 2023 EPS is pegged at $6.69, implying a year-over-year improvement of 4.2%.
NEE’s long-term earnings growth rate is 8.4%. The Zacks Consensus Estimate for 2023 EPS is pegged at $3.11, implying a year-over-year improvement of 7.2%.