NiSource Inc.’s NI ongoing strategic investments to modernize infrastructure should further enhance the reliability of its operations. The company continues to add clean assets to its portfolio, which helps boost its overall performance. Given its growth opportunities, NiSource makes for a solid investment option in the utility sector.
Let’s focus on the factors that make this Zacks Rank #2 (Buy) company a strong investment pick at the moment.
NI’s Growth Projections & Surprise History
The Zacks Consensus Estimate for 2024 earnings per share (EPS) has increased 0.6% to $1.72 in the past 90 days.
The Zacks Consensus Estimate for third-quarter 2024 sales is pinned at $1.12 billion, indicating a year-over-year increase of 8.6%.
NiSource’s long-term (three to five years) earnings growth rate is 6%. It delivered an average earnings surprise of 20.6% in the past four quarters.
NI’s Debt Position
Currently, NiSource’s total debt to capital is 57.85%, better than the industry’s average of 60.86%.
The time-to-interest earned ratio at the end of the second quarter of 2024 was 2.8. The ratio, being greater than one, reflects the company’s ability to meet future interest obligations without difficulties.
NI’s Dividend Growth
NiSource has been consistently paying dividends to its shareholders. Currently, NiSource’s quarterly dividend is 26.5 cents per share, resulting in an annualized dividend of $1.06, up 6% from the previous level of $1. The company expects an annual dividend payout ratio of 60-70%. Its current dividend yield is 3.15%, better than the Zacks S&P 500 composite’s 1.28%.
NI’s Systematic Investments
NiSource continues to work on a long-term utility infrastructure modernization program. The company expects investments to be in the range of $3.3-$3.5 billion for 2024. It also projects an investment of $16.4 billion during 2024-2028. NiSource expects an annual rate base growth of 8-10% in 2023-2028, caused by its capital expenditures.
The company has a 100% regulated utility business model. NI’s planned regulated investments should improve the reliability and safety of its services and provide efficient electric and natural gas services to its increasing customer base.
NI’s Stock Price Performance
In the past six months, the stock has returned 25.4% compared with the industry’s growth of 20%.
Image Source: Zacks Investment Research
Other Stocks to Consider
A few other top-ranked stocks from the same industry are Evergy EVRG, DTE Energy DTE and Xcel Energy XEL, each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
EVRG’s long-term earnings growth rate is 5%. The Zacks Consensus Estimate for 2024 EPS implies an improvement of 8.8% from the bottom line recorded in 2023.
DTE’s long-term earnings growth rate is 8.14%. The Zacks Consensus Estimate for 2024 EPS implies an improvement of 16.9% from the bottom line recorded in 2023.
XEL’s long-term earnings growth rate is 6.4%. The company delivered an average earnings surprise of 0.7% in the trailing four quarters.
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