NiSource Investing Heavily In Infrastructure


Utility companyNiSource 's ( NI ) fundamentals have shown a bit of slack.

Earnings increased modestly the past few years as revenue declined the past three years. But analysts expect improvement.

For the fourth quarter, analysts estimate revenue of $1.45 billion, up 4%, according to Thomson Reuters. EPS is pegged at 47 cents, up 7% over the year-ago period.

Full 2013 revenue is expected to rise 12% and in 2014 up a further 6%. For 2014, the consensus estimate for EPS is an increase of 8%.

The company's major infrastructure investment programs and a modest economic recovery are the main factors behind the company's outlook, noted a report from Hilliard Lyons following NiSource's results.

NiSource -- which provides natural gas and electricity services to about 4 million customers stretching from the Gulf Coast through the Midwest to New England -- is spending heavily on pipelines and other modernizations.

It is also seeking rate increases in some states.

"We appreciate NiSource's capital expenditure program of $2 billion for the year, nearly 75% of which is focused on accretive and other revenue-generating investments," Zacks Investment Research noted in a report following NiSource's earnings announcement. "This will likely benefit the company's top line, thereby expanding margins."

NiSource pays a quarterly dividend of 25 cents a share, for an annualized yield of about 3%. The dividend was most recently increased in March, when NiSource announced it was raising it from 24 cents a share.

The stock broke out of a cup-with-handle base Oct. 17 and closed Monday 1% above the 31.34 buy point. Shares haven't quite recovered to the all-time high reached 15 years ago.

NiSource remains heavily owned by institutions. A total 879 funds hold its shares.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Personal Finance , Investing Ideas

Referenced Stocks: NI

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