NiSource Inc.NI’s consistent investments to strengthen existing infrastructure, stable returns from regulated assets, and focus on clean energy are expected to propel its performance. NiSource continues its cost savings initiatives and expects lower operating and maintenance costs. For 2023, the company expects capital expenditures to be in the range of $3.3 billion to $3.6 billion. Given its strong dividend history and growth prospects, NiSource is a solid investment option in the utilities sector.
Let’s focus on the factors that make this stock from Zacks Rank #2 (Buy) a strong investment choice right now. You can see the full list of today’s Zacks #1 Rank (Strong Buy) stocks can be found here.
Growth forecasts and long-term earnings growth
The Zacks Consensus estimate for 2023 earnings per share (EPS) is up 0.6% over the past 60 days to $1.55. This means an annual increase of 5.44%.
NiSource’s long-term earnings growth (three to five years) is set at 6.82%. It had delivered an average earnings surprise of 0.18% over the past four quarters.
return on equity
Return on equity (ROE) indicates how efficiently a company has used funds to generate higher returns. Currently, NiSource’s ROE is 11.13%, ahead of the industry average of 6.14%. This suggests that the company has used funds more constructively than its peers in the power industry.
dividend growth
NiSource has been rewarding its shareholders for 34 years. It has increased its dividend seven times year over year over the past seven years. Its current dividend yield is 3.61%, better than the Zacks S&P 500 Composite’s 1.6% yield. Recently, the company’s board of directors approved a 6.4% quarterly dividend increase from 23.5 cents to 25 cents. That increase has resulted in an annualized $1 per share dividend of 94 cents per share. Currently, the dividend payout is 68%, up 4% year over year.
Systematic investments & customer growth
NiSource plans to further improve the reliability of natural gas and electric power operations with investments of US$30 billion over the period 2023-2032. The company has planned $3 billion in renewable energy investments through 2023. These investments and renewable projects will enhance the company’s clean power generation portfolio.
The company’s gas distribution segment added 22,153 new customers in 2022, compared to 16,436 in 2021. The Electric segment added 2,653 new customers in 2022, compared to 4,115 in 2021.
value for money
Over the past month, NiSource stock has returned 1.5% while the industry average is down 3.6%.
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Other stocks to consider
A few other high-ranking stocks in the same industry are Center Point Energy, Inc. cnp, Xcel Energy, Inc. XEL and Ameren Corporation AEE, who currently each hold a #2 Zacks rank.
CenterPoint Energy’s long-term (three- to five-year) earnings growth is locked in at 6%. The Zacks Consensus estimate for 2023 earnings per share (EPS) is $1.49, up 7.97% year over year.
Xcel Energy’s long-term earnings growth is set at 6.62%. The Zacks consensus estimate for 2023 earnings per share is $3.37, up 6.31% year over year.
Ameren’s long-term earnings growth is locked in at 6.86%. The Zacks consensus estimate for 2023 earnings per share is $4.35, up 5.07% year over year.
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Ameren Corporation (AEE): Free Stock Research Report
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