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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 to modernize infrastructure will further enhance the reliability of its operations. The company continues to add clean assets to its portfolio, which helps boost its overall 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 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) remained unchanged at $1.71 in the past 90 days.
The Zacks Consensus Estimate for 2024 sales is pinned at $6.14 billion, indicating a year-over-year increase of 11.5%.
NiSource’s long-term (three to five years) earnings growth rate is 6%. 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 10.11%, higher than the industry’s average of 8.66%. This indicates that the company has been utilizing the funds more constructively than its peers in the utility electric power industry.
Debt Position
Currently, NiSource’s total debt to capital is 58.23%, better than the industry’s average of 61.5%.
The time-to-interest earned ratio at the end of the fourth quarter of 2023 was 2.7. The ratio, being greater than one, reflects the company’s ability to meet future interest obligations without difficulties.
Dividend History
NiSource has been consistently paying dividends to its shareholders. Currently, NiSource’s quarterly dividend is 26.5 cents per share, resulting in an annualized dividend of $1.06, up 6% from the previous level of $1. The company expects an annual dividend payout ratio of 60-70%. Its current dividend yield is 3.88%, better than the Zacks S&P 500 Composite’s 1.29%.
Systematic Investments
NiSource continues to work on a long-term utility infrastructure modernization program. The company expects investments in the range of $3.3-$3.5 billion for 2024. It also projects an investment in the range of $15.2-$16.6 billion during 2024-2028. NiSource expects an annual rate base growth of 8-10% during 2023-2028, driven by its capital expenditures.
Price Performance
In the past six months, the stock has returned 14.1% compared with the industry’s growth of 10.1%.
PNW’s long-term earnings growth rate is 7.55%. The Zacks Consensus Estimate for PNW’s 2024 EPS implies an improvement of 8.6% from the bottom line recorded in 2023.
UTL’s long-term earnings growth rate is 7.08%. The Zacks Consensus Estimate for UTL’s 2024 EPS implies an improvement of 3.6% from the bottom line recorded in 2023.
The Zacks Consensus Estimate for TAC’s 2024 EPS improved 14% over the last 60 days. The company delivered an average earnings surprise of 142.6% 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 to modernize infrastructure will further enhance the reliability of its operations. The company continues to add clean assets to its portfolio, which helps boost its overall 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 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) remained unchanged at $1.71 in the past 90 days.
The Zacks Consensus Estimate for 2024 sales is pinned at $6.14 billion, indicating a year-over-year increase of 11.5%.
NiSource’s long-term (three to five years) earnings growth rate is 6%. 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 10.11%, higher than the industry’s average of 8.66%. This indicates that the company has been utilizing the funds more constructively than its peers in the utility electric power industry.
Debt Position
Currently, NiSource’s total debt to capital is 58.23%, better than the industry’s average of 61.5%.
The time-to-interest earned ratio at the end of the fourth quarter of 2023 was 2.7. The ratio, being greater than one, reflects the company’s ability to meet future interest obligations without difficulties.
Dividend History
NiSource has been consistently paying dividends to its shareholders. Currently, NiSource’s quarterly dividend is 26.5 cents per share, resulting in an annualized dividend of $1.06, up 6% from the previous level of $1. The company expects an annual dividend payout ratio of 60-70%. Its current dividend yield is 3.88%, better than the Zacks S&P 500 Composite’s 1.29%.
Systematic Investments
NiSource continues to work on a long-term utility infrastructure modernization program. The company expects investments in the range of $3.3-$3.5 billion for 2024. It also projects an investment in the range of $15.2-$16.6 billion during 2024-2028. NiSource expects an annual rate base growth of 8-10% during 2023-2028, driven by its capital expenditures.
Price Performance
In the past six months, the stock has returned 14.1% compared with the industry’s growth of 10.1%.
Image Source: Zacks Investment Research
Other Stocks to Consider
A few other top-ranked stocks from the same industry are Pinnacle West Capital Corporation (PNW - Free Report) , Unitil Corporation (UTL - Free Report) and TransAlta (TAC - 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.
PNW’s long-term earnings growth rate is 7.55%. The Zacks Consensus Estimate for PNW’s 2024 EPS implies an improvement of 8.6% from the bottom line recorded in 2023.
UTL’s long-term earnings growth rate is 7.08%. The Zacks Consensus Estimate for UTL’s 2024 EPS implies an improvement of 3.6% from the bottom line recorded in 2023.
The Zacks Consensus Estimate for TAC’s 2024 EPS improved 14% over the last 60 days. The company delivered an average earnings surprise of 142.6% in the last four quarters.