NYSE:NI

Stock Analysis Report

Executive Summary

NiSource Inc., an energy holding company, operates as a regulated natural gas and electric utility company in the United States.

Rewards

Earnings are forecast to grow 11.92% per year

Became profitable this year

Risk Analysis

Interest payments are not well covered by earnings

Unstable dividend track record

Large one-off items impacting financial results

Shareholders have been diluted in the past year



Snowflake Analysis

Second-rate dividend payer and overvalued.


Similar Companies

WEC Energy Group

NYSE:WEC

Share Price & News

How has NiSource's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: NI has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

4.2%

NI

3.4%

US Integrated Utilities

1.7%

US Market


1 Year Return

9.0%

NI

21.8%

US Integrated Utilities

23.6%

US Market

Return vs Industry: NI underperformed the US Integrated Utilities industry which returned 19.5% over the past year.

Return vs Market: NI underperformed the US Market which returned 24.7% over the past year.


Shareholder returns

NIIndustryMarket
7 Day4.2%3.4%1.7%
30 Day4.6%2.5%3.5%
90 Day2.7%1.7%11.7%
1 Year12.2%9.0%26.0%21.8%26.2%23.6%
3 Year43.0%30.8%46.1%31.4%53.2%43.3%
5 Year94.9%-33.8%59.9%28.2%75.5%56.1%

Price Volatility Vs. Market

How volatile is NiSource's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is NiSource undervalued compared to its fair value and its price relative to the market?

23.47x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: NI ($28.18) is trading above our estimate of fair value ($20.58)

Significantly Below Fair Value: NI is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: NI is poor value based on its PE Ratio (22.8x) compared to the Integrated Utilities industry average (21x).

PE vs Market: NI is poor value based on its PE Ratio (22.8x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: NI is poor value based on its PEG Ratio (1.9x)


Price to Book Ratio

PB vs Industry: NI is good value based on its PB Ratio (2.2x) compared to the US Integrated Utilities industry average (2.2x).


Next Steps

Future Growth

How is NiSource forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

8.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: NI's forecast earnings growth (11.9% per year) is above the savings rate (1.7%).

Earnings vs Market: NI's earnings (11.9% per year) are forecast to grow slower than the US market (14.3% per year).

High Growth Earnings: NI's earnings are forecast to grow, but not significantly.

Revenue vs Market: NI's revenue (3.8% per year) is forecast to grow slower than the US market (7.5% per year).

High Growth Revenue: NI's revenue (3.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: NI's Return on Equity is forecast to be low in 3 years time (8.8%).


Next Steps

Past Performance

How has NiSource performed over the past 5 years?

-13.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: NI has a large one-off gain of $534.3M impacting its September 30 2019 financial results.

Growing Profit Margin: NI became profitable in the past.


Past Earnings Growth Analysis

Earnings Trend: NI's earnings have declined by -13.6% per year over the past 5 years.

Accelerating Growth: NI has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: NI has become profitable in the last year, making it difficult to compare its past year earnings growth to the Integrated Utilities industry (-9.8%).


Return on Equity

High ROE: NI's Return on Equity (8.7%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is NiSource's financial position?


Financial Position Analysis

Short Term Liabilities: NI's short term assets ($1.4B) do not cover its short term liabilities ($3.3B).

Long Term Liabilities: NI's short term assets ($1.4B) do not cover its long term liabilities ($12.9B).


Debt to Equity History and Analysis

Debt Level: NI's debt to equity ratio (160.8%) is considered high.

Reducing Debt: NI's debt to equity ratio has reduced from 161.9% to 160.8% over the past 5 years.

Debt Coverage: NI's debt is not well covered by operating cash flow (9%).

Interest Coverage: NI's interest payments on its debt are not well covered by EBIT (0.8x coverage).


Balance Sheet

Inventory Level: NI has a high level of physical assets or inventory.

Debt Coverage by Assets: NI's debt is not covered by short term assets (assets are 0.1x debt).


Next Steps

Dividend

What is NiSource's current dividend yield, its reliability and sustainability?

2.75%

Current Dividend Yield


Dividend Yield vs Market

company2.8%marketbottom25%1.4%markettop25%3.7%industryaverage3.2%forecastin3Years3.1%

Current dividend yield vs market & industry

Notable Dividend: NI's dividend (2.84%) is higher than the bottom 25% of dividend payers in the US market (1.4%).

High Dividend: NI's dividend (2.84%) is low compared to the top 25% of dividend payers in the US market (3.66%).


Stability and Growth of Payments

Stable Dividend: NI's dividend payments have been volatile in the past 10 years.

Growing Dividend: NI's dividend payments have fallen over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (64.7%), NI's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: NI's dividends in 3 years are forecast to be covered by earnings (60.5% payout ratio).


Next Steps

Management

What is the CEO of NiSource's salary, the management and board of directors tenure and is there insider trading?

4.5yrs

Average management tenure


CEO

Joe Hamrock (55yo)

4.5yrs

Tenure

US$5,778,515

Compensation

Mr. Joseph J. Hamrock, also known as Joe, has been the Chief Executive Officer and President of NiSource Inc. since July 1, 2015. Mr. Hamrock serves as the Director at OhioHealth Corporation. Mr. Hamrock s ...


CEO Compensation Analysis

Compensation vs Market: Joe's total compensation ($USD5.78M) is below average for companies of similar size in the US market ($USD10.76M).

Compensation vs Earnings: Joe's compensation has been consistent with company performance over the past year.


Management Age and Tenure

4.5yrs

Average Tenure

54.5yo

Average Age

Experienced Management: NI's management team is considered experienced (4.5 years average tenure).


Board Age and Tenure

4.2yrs

Average Tenure

59.5yo

Average Age

Experienced Board: NI's board of directors are considered experienced (4.2 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

SellUS$174,08415 Aug 19
Michael Jesanis
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares6,000
Max PriceUS$29.01
SellUS$280,40707 Aug 19
Donald Brown
EntityIndividual
Role
Chief Financial Officer
Executive VP & CFO
Shares10,000
Max PriceUS$28.05
SellUS$1,186,16306 Aug 19
Pablo Vegas
EntityIndividual
Role
Senior Key Executive
Executive VP & President of Gas Utilities
Shares39,618
Max PriceUS$29.94
SellUS$357,36006 Aug 19
Joseph Mulpas
EntityIndividual
Role
Chief Accounting Officer
VP, Chief Accounting Officer & Controller
Shares12,000
Max PriceUS$29.78
SellUS$659,12006 Aug 19
Carrie Hightman
EntityIndividual
Role
Chief Legal Officer
Executive VP & Chief Legal Officer
Shares22,000
Max PriceUS$29.96
SellUS$119,84006 Aug 19
Michael Jesanis
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares4,000
Max PriceUS$29.96
SellUS$404,46006 Aug 19
Peter Disser
EntityIndividual
Shares13,500
Max PriceUS$29.96
SellUS$1,178,21006 Aug 19
Violet Sistovaris
EntityIndividual
Role
Senior Key Executive
Executive VP & President of Northern Indiana Public Service Company
Shares40,405
Max PriceUS$29.16

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 7%.


Management Team

  • Joe Hamrock (55yo)

    President

    • Tenure: 4.5yrs
    • Compensation: US$5.78m
  • Violet Sistovaris (57yo)

    Executive VP & President of Northern Indiana Public Service Company

    • Tenure: 4.5yrs
    • Compensation: US$1.43m
  • Randy Hulen (56yo)

    VP of Investor Relations & Treasurer

    • Carrie Hightman (62yo)

      Executive VP & Chief Legal Officer

      • Tenure: 12.1yrs
      • Compensation: US$1.39m
    • Pablo Vegas (46yo)

      Executive VP & President of Gas Utilities

      • Tenure: 3.7yrs
      • Compensation: US$1.60m
    • Joe Mulpas (48yo)

      VP, Chief Accounting Officer & Controller

      • Tenure: 5.7yrs
    • Donald Brown (47yo)

      Executive VP & CFO

      • Tenure: 4.5yrs
      • Compensation: US$1.64m
    • Mike Banas

      Director of Corporate Communications

      • Suzanne Surface (54yo)

        Chief Services Officer

        • Tenure: 1yrs
      • Ken Keener

        Senior VP & Chief Human Resources Officer

        • Tenure: 0.4yrs

      Board Members

      • Peter Altabef (59yo)

        Independent Director

        • Tenure: 3yrs
        • Compensation: US$255.32k
      • Carolyn Woo (65yo)

        Independent Director

        • Tenure: 22yrs
        • Compensation: US$261.86k
      • Kevin Kabat (62yo)

        Independent Chairman of the Board

        • Tenure: 0.7yrs
        • Compensation: US$322.32k
      • Mike Jesanis (62yo)

        Independent Director

        • Tenure: 11.7yrs
        • Compensation: US$262.36k
      • Deb Henretta (58yo)

        Independent Director

        • Tenure: 5yrs
        • Compensation: US$242.36k
      • Joe Hamrock (55yo)

        President

        • Tenure: 4.5yrs
        • Compensation: US$5.78m
      • Theo Bunting (60yo)

        Director

        • Tenure: 1.3yrs
        • Compensation: US$124.14k
      • Eric Butler (58yo)

        Director

        • Tenure: 2.5yrs
        • Compensation: US$237.36k
      • Wayne DeVeydt (49yo)

        Independent Director

        • Tenure: 3.8yrs
        • Compensation: US$232.36k
      • Aris Candris (67yo)

        Independent Director

        • Tenure: 7.7yrs
        • Compensation: US$262.36k

      Company Information

      NiSource Inc.'s company bio, employee growth, exchange listings and data sources


      Key Information

      • Name: NiSource Inc.
      • Ticker: NI
      • Exchange: NYSE
      • Founded: 1912
      • Industry: Multi-Utilities
      • Sector: Utilities
      • Market Cap: US$10.848b
      • Shares outstanding: 373.54m
      • Website: https://www.nisource.com

      Number of Employees


      Location

      • NiSource Inc.
      • 801 East 86th Avenue
      • Merrillville
      • Indiana
      • 46410
      • United States

      Listings

      TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
      NINYSE (New York Stock Exchange)YesCommon StockUSUSDJan 1968
      NOUDB (Deutsche Boerse AG)YesCommon StockDEEURJan 1968
      0K87LSE (London Stock Exchange)YesCommon StockGBUSDJan 1968
      NI.PRBNYSE (New York Stock Exchange)6.5% DEPSHS PFDBUSUSDNov 2018
      N1IS34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH REPR 1 COMBRBRLDec 2019

      Biography

      NiSource Inc., an energy holding company, operates as a regulated natural gas and electric utility company in the United States. The company operates in two segments, Gas Distribution Operations and Electric Operations. It provides natural gas service and transportation for residential, commercial, and industrial customers; generates, transmits, and distributes electricity; and wholesale and transmission transaction services. The company owns and operates 2 coal-fired electric generating stations with a capacity of 2,080 megawatts (MW); combined cycle gas turbine with a capacity of 571 MW; 3 gas-fired generating units with a capacity of 186 MW; and 2 hydroelectric generating plants with a capacity of 16 MW. It serves approximately 3.5 million natural gas customers in Ohio, Pennsylvania, Virginia, Kentucky, Maryland, Indiana, and Massachusetts; and 472,000 electricity customers in the northern part of Indiana. The company was formerly known as NIPSCO Industries, Inc. and changed its name to NiSource Inc. in April 1999. NiSource Inc. was founded in 1912 and is headquartered in Merrillville, Indiana. 


      Company Analysis and Financial Data Status

      All financial data provided by Standard & Poor's Capital IQ.
      DataLast Updated (UTC time)
      Company Analysis2020/01/20 23:42
      End of Day Share Price2020/01/17 00:00
      Earnings2019/09/30
      Annual Earnings2018/12/31


      Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.