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Here's Why You Should Add NiSource (NI) to Your Portfolio Now
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NiSource Inc.’s (NI - Free Report) long-term investment plans in modernizing infrastructure will further enhance the reliability of its operations. The company continues to add clean assets to its portfolio, which helps boost its earnings performance. Given its growth opportunities, NiSource makes for a solid investment option in the utility sector.
Let’s focus on the factors that make this currently Zacks Rank #2 (Buy) company a strong investment pick at the moment.
Growth Projections & Surprise History
The Zacks Consensus Estimate for 2024 earnings per share (EPS) has moved up 1.2% in the past 90 days to $1.71.
The Zacks Consensus Estimate for 2024 sales is pinned at $6.02 billion, indicating a year-over-year increase of 5.8%.
NiSource’s long-term (three to five years) earnings growth rate is 7.15%. It delivered an average earnings surprise of 5.6% in the last four quarters.
Return on Equity
Return on equity (ROE) indicates how efficiently a company has been utilizing the funds to generate higher returns. Currently, NiSource’s ROE is 11.14%, higher than the industry’s average of 7%. This indicates that the company has been utilizing the funds more constructively than its peers in the utility electric power industry.
Solvency
The times interest earned ratio is a solvency ratio. It is used to measure how well the company can cover its interest obligations. NI’s times interest earned ratio at the end of third-quarter 2023 was 2.9, which being greater than one indicates that the company is in a good position to meet its interest obligations. The company had $1 billion net liquidity available as of Sep 30, 2023, which is adequate to meet its debt obligations.
Dividend History
NiSource has been consistently paying dividends to its shareholders. Currently, NiSource’s quarterly dividend is 25 cents per share. This results in an annualized dividend of $1 per share. The company expects an annual dividend payout ratio of 60-70%. Its current dividend yield is 3.7%, better than the Zacks S&P 500 Composite’s 1.6%.
Systematic Investments
NiSource projected an investment in the range of $15.2-$16.6 billion during 2024-2028. NI expects an annual rate base growth of 8-10% in 2023-2028, driven by its capital expenditures. More than 75% of the company’s capital expenditures start providing returns in less than 18 months of investment.
Price Performance
In the past month, the stock has returned 2.8% against the industry’s decline of 1.7%.
NRG Energy’s long-term earnings growth rate is 13.75%. The company delivered an average earnings surprise of 4.7% in the last four quarters.
Consolidated Edison’s long-term earnings growth rate is 2%. The Zacks Consensus Estimate for the company’s 2024 EPS is pinned at $5.28, implying a year-over-year increase of 5.4%.
OGE Energy’s long-term earnings growth rate is 3.65%. The company delivered an average earnings surprise of 8.3% in the last four quarters.
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Here's Why You Should Add NiSource (NI) to Your Portfolio Now
NiSource Inc.’s (NI - Free Report) long-term investment plans in modernizing infrastructure will further enhance the reliability of its operations. The company continues to add clean assets to its portfolio, which helps boost its earnings performance. Given its growth opportunities, NiSource makes for a solid investment option in the utility sector.
Let’s focus on the factors that make this currently Zacks Rank #2 (Buy) company a strong investment pick at the moment.
Growth Projections & Surprise History
The Zacks Consensus Estimate for 2024 earnings per share (EPS) has moved up 1.2% in the past 90 days to $1.71.
The Zacks Consensus Estimate for 2024 sales is pinned at $6.02 billion, indicating a year-over-year increase of 5.8%.
NiSource’s long-term (three to five years) earnings growth rate is 7.15%. It delivered an average earnings surprise of 5.6% in the last four quarters.
Return on Equity
Return on equity (ROE) indicates how efficiently a company has been utilizing the funds to generate higher returns. Currently, NiSource’s ROE is 11.14%, higher than the industry’s average of 7%. This indicates that the company has been utilizing the funds more constructively than its peers in the utility electric power industry.
Solvency
The times interest earned ratio is a solvency ratio. It is used to measure how well the company can cover its interest obligations. NI’s times interest earned ratio at the end of third-quarter 2023 was 2.9, which being greater than one indicates that the company is in a good position to meet its interest obligations. The company had $1 billion net liquidity available as of Sep 30, 2023, which is adequate to meet its debt obligations.
Dividend History
NiSource has been consistently paying dividends to its shareholders. Currently, NiSource’s quarterly dividend is 25 cents per share. This results in an annualized dividend of $1 per share. The company expects an annual dividend payout ratio of 60-70%. Its current dividend yield is 3.7%, better than the Zacks S&P 500 Composite’s 1.6%.
Systematic Investments
NiSource projected an investment in the range of $15.2-$16.6 billion during 2024-2028. NI expects an annual rate base growth of 8-10% in 2023-2028, driven by its capital expenditures. More than 75% of the company’s capital expenditures start providing returns in less than 18 months of investment.
Price Performance
In the past month, the stock has returned 2.8% against the industry’s decline of 1.7%.
Image Source: Zacks Investment Research
Other Stocks to Consider
A few other top-ranked stocks from the same industry are NRG Energy (NRG - Free Report) , sporting a Zacks Rank #1 (Strong Buy), and Consolidated Edison (ED - Free Report) and OGE Energy (OGE - Free Report) , both carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
NRG Energy’s long-term earnings growth rate is 13.75%. The company delivered an average earnings surprise of 4.7% in the last four quarters.
Consolidated Edison’s long-term earnings growth rate is 2%. The Zacks Consensus Estimate for the company’s 2024 EPS is pinned at $5.28, implying a year-over-year increase of 5.4%.
OGE Energy’s long-term earnings growth rate is 3.65%. The company delivered an average earnings surprise of 8.3% in the last four quarters.