Head to Head Review: NiSource (NI) and Its Peers

NiSource (NYSE:NI) is one of 52 public companies in the “Multi – Utilities” industry, but how does it compare to its competitors? We will compare NiSource to related businesses based on the strength of its valuation, earnings, dividends, profitability, institutional ownership, analyst recommendations and risk.

Dividends

NiSource pays an annual dividend of $1.20 per share and has a dividend yield of 2.7%. NiSource pays out 61.5% of its earnings in the form of a dividend. As a group, “Multi – Utilities” companies pay a dividend yield of 9.3% and pay out 33.6% of their earnings in the form of a dividend. NiSource has increased its dividend for 14 consecutive years. NiSource lags its competitors as a dividend stock, given its lower dividend yield and higher payout ratio.

Valuation & Earnings

This table compares NiSource and its competitors top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
NiSource	$6.64 billion	$929.50 million	22.62
NiSource Competitors	$16.30 billion	$269.64 million	28.16

NiSource’s competitors have higher revenue, but lower earnings than NiSource. NiSource is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Analyst Recommendations

This is a summary of current ratings and target prices for NiSource and its competitors, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NiSource	0	1	12	0	2.92
NiSource Competitors	1053	4115	4432	87	2.37

NiSource presently has a consensus price target of $48.58, suggesting a potential upside of 10.14%. As a group, “Multi – Utilities” companies have a potential upside of 30.06%. Given NiSource’s competitors higher probable upside, analysts plainly believe NiSource has less favorable growth aspects than its competitors.

Profitability

This table compares NiSource and its competitors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NiSource	13.56%	8.16%	2.60%
NiSource Competitors	8.85%	14.88%	4.08%

Insider and Institutional Ownership

91.6% of NiSource shares are owned by institutional investors. Comparatively, 60.7% of shares of all “Multi – Utilities” companies are owned by institutional investors. 0.4% of NiSource shares are owned by insiders. Comparatively, 10.1% of shares of all “Multi – Utilities” companies are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Volatility & Risk

NiSource has a beta of 0.53, suggesting that its stock price is 47% less volatile than the S&P 500. Comparatively, NiSource’s competitors have a beta of 0.68, suggesting that their average stock price is 32% less volatile than the S&P 500.

Summary

NiSource competitors beat NiSource on 10 of the 15 factors compared.

About NiSource

NiSource Inc., an energy holding company, operates as a regulated natural gas and electric utility company in the United States. It operates in two segments, Gas Distribution Operations and Electric Operations. The company distributes natural gas to approximately 3.3 million customers through approximately 55,000 miles of distribution main pipeline and the associated individual customer service lines; and 1,000 miles of transmission main pipeline in northern Indiana, Ohio, Pennsylvania, Virginia, Kentucky, and Maryland. It also generates, transmits, and distributes electricity to approximately 0.5 million customers in various counties in the northern part of Indiana, as well as engages in wholesale electric and transmission transactions. It owns and operates coal-fired electric generating stations in Wheatfield and Michigan City; combined cycle gas turbine in West Terre Haute; natural gas generating units in Wheatfield; hydro generating plants in Carroll County and White County; wind generating units in White County, Indiana; and solar generating units in Jasper County and White County. The company was formerly known as NIPSCO Industries, Inc. and changed its name to NiSource Inc. in April 1999. NiSource Inc. was founded in 1847 and is headquartered in Merrillville, Indiana.