Canada markets closed

Here's Why You Should Add NiSource (NI) in Your Portfolio Now

Zacks Equity Research

NiSource, Inc NI will benefit from its consistent investments to strengthen its existing infrastructure and focus on clean energy.

Let’s take a look at the factors that are working in favor of this Zacks Rank #2 (Buy) utility company. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Price Performance & Long-Term Growth

The company’s shares have gained 3.5% in the past month compared with the industry’s rise of 2.3%.

The company’s long-term (three to five years) earnings growth is pegged at 5.26%.

Systematic Investments

NiSource is working on long-term utility infrastructure modernization program. It will make capital investment in the range of $1.7-$1.8 billion in 2019, $1.7-$1.8 billion in 2020 and $1.7-$2 billion annually over the 2021-2022 time period. The company continues to execute on an estimated $30-billion investment for long-term infrastructure investments. This long-term investment includes $20 billion for gas and $10 billion for electricity.

Dividend Yield & Return on Equity (ROE)

More than 75% of the company’s invested capital expenditures provide return within 12 months of investment. The clear visibility of return from ongoing investments will enable NiSource to deliver targeted earnings and dividend growth of 5-7% annually through 2022. Currently, the company has a dividend yield of 2.98% compared with the Zacks S&P 500 composite’s 1.82% and the industry’s 2.89%.

NiSource has an ROE of 9.70%, higher than the industry’s average of 9.47%. This indicates the company’s efficiency in utilizing shareholders’ funds.

Growth Projections

The Zacks Consensus Estimate for 2019 earnings per share is pegged at $1.30 on $5.32 billion revenues. The projected top line indicates 4.10% year-over-year increase, while the bottom-line is expected to remain unchanged.

The consensus mark for 2020 earnings is pegged at $1.37 per share on revenues of $5.63 billion. The bottom line expectation translates to a 5.58% increase and the top line projects a 5.69% improvement on a year-over-year basis.

Other Stocks to Consider

Some other top-ranked stocks from the same industry are FirstEnergy Corporation FE, Southern Company SO and The AES Corporation AES. All the three stocks hold a Zacks Rank #2.

Long-term earnings growth of FirstEnergy, Southern Company and The AES Corporation is pegged at 6%, 4.5% and 8.49%, respectively.

FirstEnergy, Southern Company and The AES Corporation delivered an average positive earnings surprise of 2.87%, 8.21% and 4.68% in the last four quarters, respectively.

Free: Zacks’ Single Best Stock Set to Double

Today you are invited to download our latest Special Report that reveals 5 stocks with the most potential to gain +100% or more in 2020. From those 5, Zacks Director of Research, Sheraz Mian hand-picks one to have the most explosive upside of all.

This pioneering tech ticker had soared to all-time highs and then subsided to a price that is irresistible. Now a pending acquisition could super-charge the company’s drive past competitors in the development of true Artificial Intelligence. The earlier you get in to this stock, the greater your potential gain.

See 5 Stocks Set to Double>>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
The AES Corporation (AES) : Free Stock Analysis Report
Southern Company (The) (SO) : Free Stock Analysis Report
NiSource, Inc (NI) : Free Stock Analysis Report
FirstEnergy Corporation (FE) : Free Stock Analysis Report
To read this article on click here.
Zacks Investment Research