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Should You Add NiSource (NI) to Your Portfolio Now?

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NiSource Inc.’s (NI - Free Report) consistent investments to strengthen its existing infrastructure and focus on clean energy are expected to drive its performance.

Adding this Zacks Rank #2 (Buy) stock to your portfolio now is a good idea, given the following positive factors.

Positive Growth Projections: The Zacks Consensus Estimate for earnings is $1.19 on revenues of $4.79 billion for 2017. The bottom line is expected to improve 10.08% year over year and the top-line projection is 6.6% higher. For 2018, the Zacks Consensus Estimate for earnings is pegged at $1.26 on $4.92 billion revenues. While earnings represent a 5.6% rally, revenues reflect a 2.9% rise.

NiSource has long-term expected earnings per share growth rate of 6.1%.

Estimates Moving Up: The Zacks Consensus Estimate has witnessed upward revisions in the last 60 days. Estimates for both 2017 and 2018 have inched up 0.8% in the last 60 days.

Strong Return: Year to date, NiSource’s shares have rallied 21.5%, outperforming the industry’s gain of 10.2%



Growth Drivers

NiSource will make planned utility infrastructure investments worth about $1.6-$1.7 billion in 2017. Also, it has identified long-term infrastructure investments worth $30 billion, with more than 90% of it allocated to regulated pipes and wires. The annual investment in 2018-2020 period is expected to be between $1.6 billion and $1.8 billion. Continued investments will allow the company to deliver its targeted earnings and dividend growth of 5-7% through 2020.

The company expects coal to drop to 42% of its generation mix by 2023, from the current level of 78%. The company will do the same by retrofitting emission control equipment in its existing coal plants, retiring old coal plants and replacing coal fired units with renewable sources.

NiSource has a 100% regulated utility business model. Its planned regulated investments will improve reliability and safety of its services and provide efficient natural gas services to its increasing customer base. Gas Distribution Operations experienced a $22 million increase in net revenues due to new rates while Electric Operations registered $42 million increase in net revenues due to rate revisions

Other Stocks to Consider

Some other stocks in the same industry worth considering are Fortis Inc. (FTS - Free Report) sporting a Zacks Rank #1 (Strong Buy), CenterPoint Energy, Inc. (CNP - Free Report) and NRG Energy (NRG - Free Report) carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Fortis delivered a four-quarter average positive surprise of nearly 11%. The company’s long-term earnings growth rate is pegged at 5.5%.

CenterPoint Energy delivered a four-quarter average positive surprise of 10.3%. The company’s long-term earnings growth rate is pegged at 4.3%.

NRG Energy delivered a four-quarter average positive surprise of 457%. The company’s 2017 Zacks Consensus Estimate went up 33.3% in the last 60 days.

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CenterPoint Energy, Inc. (CNP) - free report >>

NiSource, Inc (NI) - free report >>

NRG Energy, Inc. (NRG) - free report >>

Fortis Inc. (FTS) - free report >>


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