Reasons to Add NiSource (NI) to Your Portfolio Right Now
NiSource Inc.’s NI solid investment plan over the next four years to provide safe, reliable and clean energy will boost its performance. The company will further benefit from a stable financial position.
Let’s explore the factors that make this Zacks Rank #2 (Buy) stock a strong investment pick at the moment.
Growth Projections & Earnings Suprise
NiSource’s long-term (three to five-year) earnings growth rate is 7.2%.
The Zacks Consensus Estimate for NI’s 2023 earnings per share (EPS) stands at $1.60, increasing 1.3% over the past 60 days.
The consensus estimate for 2024 EPS is pegged at $1.70, up 0.6% over the past 60 days.
The stock delivered an average earnings surprise of 5.59% in the previous four quarters.
Return on Equity (ROE)
ROE indicates how efficiently a company utilizes its funds to generate higher returns. NI’s ROE is currently pegged at 11.14%, higher than the industry’s average of 7%, which indicates that the company is utilizing its funds more efficiently than its peers.
Solvency
The times interest earned ratio is a solvency ratio. It is used to measure how well the company can cover its interest obligations. The time-to-interest earned ratio at the end of third-quarter 2023 was 2.94, which being greater than one indicates that the company is in a good position to meet its interest obligations.
Dividend History
NiSource has been consistently paying dividends to its shareholders. NiSource’s quarterly dividend currently stands at 25 cents. The company’s new annualized dividend rate is $1 compared with the previous annual rate of 94 cents per share. The company’s current dividend payout target is in the range of 60-70%.
The company’s current dividend yield is 3.82%, better than the Zacks S&P 500 Composite’s 1.42%.
Systematic Investments
NiSource expects to invest $3.3-$3.6 billion in 2023. It has a capital investment plan in the range of $15.2-$16.6 billion during the 2024-2028 period to maintain the reliability and safety of its services. The company expects an annual rate base growth of 8-10% in 2023-2028, driven by its capital expenditures. More than 75% of NiSource’s capital expenditure starts providing returns in less than 18 months of investment.
Price Performance
In the past month, shares of NI have rallied 3.6% compared with the broader industry’s 3.3% increase.
Image Source: Zacks Investment Research
Other Stocks to Consider
A few other top-ranked stocks from the same industry are PPL Corp. PPL, Entergy Corp. ETR and OGE Energy OGE. Each stock presently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
PPL’s long-term earnings growth rate is 7.4%. The Zacks Consensus Estimate for 2023 EPS indicates an increase of 12.1% from the previous year’s number.
ETR’s long-term earnings growth rate is 6.4%. The company delivered an average earnings surprise of 4.35% in the last four quarters.
OGE’s long-term earnings growth rate is 3.7%. The company delivered an average earnings surprise of 8.26% in the last four quarters.
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PPL Corporation (PPL) : Free Stock Analysis Report
NiSource, Inc (NI) : Free Stock Analysis Report
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OGE Energy Corporation (OGE) : Free Stock Analysis Report
