On Sep 30, we reiterated our Neutral recommendation on
), the provider of natural gas, electricity and other products
and services in the U.S. NiSource currently has a Zacks Rank #3
Why the Reiteration?
NiSource's second-quarter 2013 top-line surpassed our expectation
mainly due to positive contribution from Gas Storage,
Transportation and Distribution as well as from Electric
segments. NiSource continues with its strategy of infrastructure
development which will prove beneficial for long-term earnings
To effectively carry out these endeavors, the company enhanced
its capital expenditure guidance for 2013 by $200 million to $2
billion. The upgrade plans are aimed at increasing service
NiSource's electricity-generating fleet is primarily fueled by
coal and natural gas. The company's gas distribution operation
comprises purchasing and reselling natural gas. As a result, the
company faces the risk of volatile commodity prices as well as
fluctuations in associated transportation costs.
Like other regulated utilities NiSource is also subject to
significant state, local and federal government regulations.
NiSource's financial health depends on frequent regulatory
proceedings for the timely recovery of incurred costs. Going
forward, we expect the cost of compliance with environmental
regulations to significantly impact NiSource's revenue base.
NiSource's distribution and transmission activities are exposed
to threats from leaks, accidents and natural disasters, which
could lead to extensive financial losses. NiSource suffered a
pipeline explosion accident in late 2012 and is presently facing
several lawsuits which might dent its pocket.
Other Stocks to Consider
Other well-placed energy companies at the moment are
Alliant Energy Corp.
Brookfield Infrastructure Partners L.P.
). All these stocks carry a Zacks Rank #2 (Buy).
BROOKFIELD INFR (BIP): Free Stock Analysis
CEMIG SA -ADR (CIG): Free Stock Analysis
ALLIANT ENGY CP (LNT): Free Stock Analysis
NISOURCE INC (NI): Free Stock Analysis Report
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