NiSource (NYSE: NI) is one of 22 public companies in the “Multiline Utilities” industry, but how does it weigh in compared to its peers? We will compare NiSource to similar businesses based on the strength of its risk, analyst recommendations, valuation, dividends, institutional ownership, earnings and profitability.

Profitability

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

Net Margins Return on Equity Return on Assets
NiSource 5.96% 9.17% 2.00%
NiSource Competitors 8.42% 8.94% 2.33%

Dividends

NiSource pays an annual dividend of $0.70 per share and has a dividend yield of 2.8%. NiSource pays out 81.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Multiline Utilities” companies pay a dividend yield of 3.1% and pay out 71.1% of their earnings in the form of a dividend. NiSource lags its peers as a dividend stock, given its lower dividend yield and higher payout ratio.

Institutional and Insider Ownership

82.0% of NiSource shares are owned by institutional investors. Comparatively, 66.2% of shares of all “Multiline Utilities” companies are owned by institutional investors. 0.4% of NiSource shares are owned by company insiders. Comparatively, 3.1% of shares of all “Multiline Utilities” companies are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for NiSource and its peers, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NiSource 0 5 7 0 2.58
NiSource Competitors 363 1074 869 9 2.23

NiSource currently has a consensus price target of $26.79, indicating a potential upside of 5.58%. As a group, “Multiline Utilities” companies have a potential upside of 11.24%. Given NiSource’s peers higher probable upside, analysts plainly believe NiSource has less favorable growth aspects than its peers.

Risk and Volatility

NiSource has a beta of 0.36, suggesting that its share price is 64% less volatile than the S&P 500. Comparatively, NiSource’s peers have a beta of 0.60, suggesting that their average share price is 40% less volatile than the S&P 500.

Earnings & Valuation

This table compares NiSource and its peers top-line revenue, earnings per share and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
NiSource $4.75 billion $1.40 billion 29.50
NiSource Competitors $7.70 billion $2.04 billion 20.50

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

Summary

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

About NiSource

NiSource Inc. is an energy holding company. The Company is engaged in the distribution of natural gas. The Company operates through two business segments: Gas Distribution Operations and Electric Operations. The Company’s Gas Distribution Operations segment provides natural gas service and transportation for residential, commercial and industrial customers in Ohio, Pennsylvania, Virginia, Kentucky, Maryland, Indiana and Massachusetts. As of December 31, 2016, the Company’s Electric Operations segment provided electric services in 20 counties in the northern part of Indiana. The Company’s electric operations segment generated, transmitted and distributed electricity through the Company’s subsidiary NIPSCO to approximately 466,000 customers in 20 counties in the northern part of Indiana and engaged in wholesale and transmission transactions, as of December 31, 2016. NIPSCO owned and operated three coal-fired electric generating stations, as of December 31, 2016.

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