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Here's Why You Should Add NiSource (NI) in Your Portfolio Now

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NiSource, Inc (NI - Free Report) will benefit from its consistent investments to strengthen its existing infrastructure and focus on clean energy.

Let’s take a look at the factors that are working in favor of this Zacks Rank #2 (Buy) utility company. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Price Performance & Long-Term Growth

The company’s shares have gained 3.5% in the past month compared with the industry’s rise of 2.3%.



The company’s long-term (three to five years) earnings growth is pegged at 5.26%.

Systematic Investments

NiSource is working on long-term utility infrastructure modernization program. It will make capital investment in the range of $1.7-$1.8 billion in 2019, $1.7-$1.8 billion in 2020 and $1.7-$2 billion annually over the 2021-2022 time period. The company continues to execute on an estimated $30-billion investment for long-term infrastructure investments. This long-term investment includes $20 billion for gas and $10 billion for electricity.

Dividend Yield & Return on Equity (ROE)

More than 75% of the company’s invested capital expenditures provide return within 12 months of investment. The clear visibility of return from ongoing investments will enable NiSource to deliver targeted earnings and dividend growth of 5-7% annually through 2022. Currently, the company has a dividend yield of 2.98% compared with the Zacks S&P 500 composite’s 1.82% and the industry’s 2.89%.

NiSource has an ROE of 9.70%, higher than the industry’s average of 9.47%. This indicates the company’s efficiency in utilizing shareholders’ funds.

Growth Projections

The Zacks Consensus Estimate for 2019 earnings per share is pegged at $1.30 on $5.32 billion revenues. The projected top line indicates 4.10% year-over-year increase, while the bottom-line is expected to remain unchanged.

The consensus mark for 2020 earnings is pegged at $1.37 per share on revenues of $5.63 billion. The bottom line expectation translates to a 5.58% increase and the top line projects a 5.69% improvement on a year-over-year basis.

Other Stocks to Consider

Some other top-ranked stocks from the same industry are FirstEnergy Corporation (FE - Free Report) , Southern Company (SO - Free Report) and The AES Corporation (AES - Free Report) . All the three stocks hold a Zacks Rank #2.

Long-term earnings growth of FirstEnergy, Southern Company and The AES Corporation is pegged at 6%, 4.5% and 8.49%, respectively.

FirstEnergy, Southern Company and The AES Corporation delivered an average positive earnings surprise of 2.87%, 8.21% and 4.68% in the last four quarters, respectively.

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