NiSource (NYSE: NI) and CenterPoint Energy (NYSE:CNP) are both mid-cap utilities companies, but which is the superior stock? We will compare the two companies based on the strength of their valuation, analyst recommendations, earnings, risk, dividends, profitability and institutional ownership.
NiSource pays an annual dividend of $0.70 per share and has a dividend yield of 2.7%. CenterPoint Energy pays an annual dividend of $1.07 per share and has a dividend yield of 3.8%. NiSource pays out 85.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. CenterPoint Energy pays out 77.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. CenterPoint Energy has increased its dividend for 11 consecutive years. CenterPoint Energy is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This is a summary of current recommendations and price targets for NiSource and CenterPoint Energy, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
NiSource presently has a consensus price target of $28.31, indicating a potential upside of 10.29%. CenterPoint Energy has a consensus price target of $29.13, indicating a potential upside of 2.70%. Given NiSource’s stronger consensus rating and higher probable upside, analysts plainly believe NiSource is more favorable than CenterPoint Energy.
Risk and Volatility
NiSource has a beta of 0.37, meaning that its stock price is 63% less volatile than the S&P 500. Comparatively, CenterPoint Energy has a beta of 0.62, meaning that its stock price is 38% less volatile than the S&P 500.
This table compares NiSource and CenterPoint Energy’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Valuation & Earnings
This table compares NiSource and CenterPoint Energy’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|NiSource||$4.49 billion||1.92||$331.50 million||$0.82||31.31|
|CenterPoint Energy||$7.53 billion||1.62||$432.00 million||$1.38||20.55|
CenterPoint Energy has higher revenue and earnings than NiSource. CenterPoint Energy is trading at a lower price-to-earnings ratio than NiSource, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
82.2% of NiSource shares are owned by institutional investors. Comparatively, 77.7% of CenterPoint Energy shares are owned by institutional investors. 0.4% of NiSource shares are owned by insiders. Comparatively, 0.2% of CenterPoint Energy shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
CenterPoint Energy beats NiSource on 10 of the 17 factors compared between the two stocks.
NiSource Company Profile
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.
CenterPoint Energy Company Profile
CenterPoint Energy, Inc. is a public utility holding company. The Company, through its subsidiaries, owns and operates electric transmission and distribution facilities, and natural gas distribution facilities. The Electric Transmission & Distribution segment provides electric transmission and distribution services to retail electric providers. Its Natural Gas Distribution segment offers intrastate natural gas sales to and natural gas transportation and distribution for residential, commercial and industrial customers. Its Energy Services segment includes non-rate regulated gas sales and transportation and storage services for commercial and industrial customers. Its Midstream Investments segment includes equity investment in Enable that owns, operates and develops natural gas and crude oil assets. Its Other Operations segment includes office buildings and other real estate used in its business operations and other corporate operations.
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