NiSource Inc. (NI)

NiSource Inc. (NI) Utility Operations & Dividend Profile

NiSource Inc. (NI) is a regulated utility company providing natural gas and electricity to over 3 million customers across the U.S. Midwest and Mid-Atlantic regions. With a focus on infrastructure modernization and sustainable energy solutions, NiSource operates in a stable, regulated market, balancing growth with environmental responsibility.

What Is the Investment Thesis for NI?

NiSource presents a stable investment profile within the regulated utilities sector, supported by its consistent dividend yield of 2.48% and a beta of 0.61, indicating lower volatility compared to the broader market. The company's regulated business model provides predictable revenue streams, while strategic investments in infrastructure modernization and renewable energy projects offer long-term growth potential. With a P/E ratio of 23.9 and a profit margin of 14.1%, NiSource demonstrates solid financial performance. Key catalysts include ongoing infrastructure upgrades and the expansion of renewable energy capacity. Potential risks involve regulatory changes and operational challenges in maintaining extensive pipeline and electric networks.

Based on FMP financials and quantitative analysis

NI Key Highlights

• Market capitalization of $22.92B, reflecting substantial investor confidence in the company's stability and growth prospects.
• Profit margin of 14.1%, indicating efficient operations and effective cost management within the regulated utility sector.
• Gross margin of 55.9%, showcasing the company's ability to maintain profitability while delivering essential services.
• Dividend yield of 2.48%, providing a steady income stream for investors and highlighting the company's commitment to shareholder returns.
• Beta of 0.61, suggesting lower volatility compared to the overall market, making it a noteworthy option for risk-averse investors.

Who Are NI's Competitors?

NI is benchmarked below against 8 industry peers on price, market cap, and our AI MoonshotScore.

AI Score by Stock Expert AI · Price data: FMP / Yahoo Finance

What Are NI's Key Strengths?

• Stable revenue streams due to regulated business model.
• Extensive infrastructure network for natural gas and electricity distribution.
• Large and diverse customer base across multiple states.
• Commitment to infrastructure modernization and renewable energy expansion.

What Are NI's Weaknesses?

• Exposure to regulatory risks and compliance costs.
• Dependence on aging infrastructure requiring ongoing maintenance and upgrades.
• Vulnerability to weather-related events and natural disasters.
• Potential for cost overruns in large-scale infrastructure projects.

What Could Drive NI Stock Higher?

• Infrastructure modernization projects to enhance safety and reliability.
• Expansion of renewable energy portfolio to meet environmental mandates.
• Regulatory approvals for new infrastructure investments.
• Completion of key renewable energy projects.

What Are the Key Risks for NI?

• Financial-distress signal — its Altman Z-Score of 0.87 sits in the distress zone (elevated bankruptcy risk).
• Changes in regulatory policies that could impact profitability.
• Weather-related events and natural disasters that could disrupt operations.
• Rising interest rates that could increase borrowing costs.
• Operational challenges in maintaining extensive pipeline and electric networks.

What Are the Growth Opportunities for NI?

• Infrastructure Modernization: NiSource is actively investing in modernizing its natural gas and electric infrastructure, replacing aging pipelines and upgrading transmission systems. These investments enhance safety, reliability, and efficiency, reducing operational costs and improving service quality. The company plans to invest billions of dollars over the next decade, creating a long-term growth opportunity. This modernization also supports the integration of new technologies and renewable energy sources, aligning with environmental goals.
• Renewable Energy Expansion: NiSource is committed to expanding its renewable energy portfolio, including wind and hydro generating units. The company's transition to cleaner energy sources aligns with state and federal mandates, reducing carbon emissions and enhancing its environmental profile. The expansion of renewable energy capacity not only addresses environmental concerns but also diversifies the company's energy mix, reducing its reliance on fossil fuels and mitigating price volatility.
• Customer Base Growth: NiSource serves a large customer base across multiple states, providing a stable foundation for revenue generation. The company can pursue organic growth by expanding its services to new residential, commercial, and industrial customers within its existing service territories. Additionally, strategic acquisitions of smaller utility companies can further expand its customer base and geographic reach, creating economies of scale and enhancing operational efficiency.
• Regulatory Support: NiSource operates in a regulated environment, which provides a degree of stability and predictability. Constructive regulatory frameworks that allow for cost recovery and incentivize investments in infrastructure and renewable energy are crucial for the company's growth. The company actively engages with regulatory agencies to advocate for policies that support its long-term strategic objectives, ensuring a favorable operating environment.
• Technological Innovation: NiSource can leverage technological innovation to improve its operations, enhance customer service, and reduce costs. Investments in smart grid technologies, advanced metering infrastructure (AMI), and data analytics can optimize energy distribution, detect and prevent outages, and provide customers with real-time energy usage information. These technologies not only improve operational efficiency but also enhance customer satisfaction and engagement.

What Opportunities Does NI Have?

• Expansion of renewable energy portfolio to meet environmental mandates.
• Strategic acquisitions of smaller utility companies to expand geographic reach.
• Leveraging technological innovation to improve operational efficiency.
• Benefiting from constructive regulatory frameworks that support cost recovery.

What Threats Does NI Face?

• Changes in regulatory policies that could impact profitability.
• Increased competition from alternative energy sources.
• Rising interest rates that could increase borrowing costs.
• Economic downturns that could reduce energy demand.

What Are NI's Competitive Advantages?

• Regulated industry: Operates in a regulated environment, providing a degree of protection from market volatility.
• Extensive infrastructure: Owns and operates a vast network of pipelines and power generation facilities.
• Geographic footprint: Serves a large customer base across multiple states, creating economies of scale.
• Essential services: Provides essential utility services that are critical for daily life and business operations.

What Does NI Do?

NiSource Inc. was founded in 1847 and is headquartered in Merrillville, Indiana. Originally known as NIPSCO Industries, Inc., the company changed its name to NiSource Inc. in April 1999. NiSource operates as a regulated natural gas and electric utility company, serving approximately 3.3 million customers. The company's Gas Distribution Operations segment delivers natural gas to around 853,000 customers in northern Indiana and approximately 2.4 million customers in Ohio, Pennsylvania, Virginia, Kentucky, and Maryland. This segment manages an extensive network of approximately 54,600 miles of distribution main pipelines and 1,000 miles of transmission main pipelines. The Electric Operations segment generates, transmits, and distributes electricity to approximately 483,000 customers in 20 counties in northern Indiana, also engaging in wholesale electric and transmission transactions. NiSource's power generation portfolio includes coal-fired, combined cycle gas turbine, natural gas, hydro, and wind generating units, totaling a diverse capacity to meet customer demand. The company is committed to modernizing its infrastructure and transitioning to cleaner energy sources.

What Products and Services Does NI Offer?

• Distributes natural gas to approximately 3.3 million customers in multiple states.
• Generates, transmits, and distributes electricity to approximately 483,000 customers in northern Indiana.
• Operates and maintains an extensive network of natural gas pipelines.
• Owns and operates a diverse portfolio of power generation facilities, including coal, gas, hydro, and wind.
• Engages in wholesale electric and transmission transactions.
• Invests in infrastructure modernization to improve reliability and safety.
• Focuses on transitioning to cleaner energy sources, including renewable energy projects.

How Does NI Make Money?

• Generates revenue through regulated rates for natural gas and electricity distribution.
• Invests in infrastructure and renewable energy projects to enhance long-term growth.
• Manages operational costs to maintain profitability and efficiency.
• Engages with regulatory agencies to ensure a favorable operating environment.

What Industry Does NI Operate In?

NiSource operates within the regulated utilities sector, which is characterized by stable demand and government oversight. The industry is undergoing a significant transition towards cleaner energy sources, driven by environmental regulations and technological advancements. Companies like NiSource are investing in renewable energy and modernizing infrastructure to meet these demands. The competitive landscape includes other major utility companies such as Atmos Energy Corporation (ATO) and CMS Energy Corporation (CMS), all vying to provide reliable and affordable energy to their respective customer bases. The regulated nature of the industry provides a degree of protection from market volatility, but also requires adherence to strict regulatory standards.

Who Are NI's Key Customers?

• Residential customers: Households that rely on NiSource for natural gas and electricity.
• Commercial customers: Businesses that use NiSource's services for their energy needs.
• Industrial customers: Manufacturing facilities and other industrial operations that require significant energy supply.
• Wholesale customers: Other utilities and energy providers that purchase electricity from NiSource.

ROE 10%Key Financial Metrics

Return on equity for NiSource Inc. stands at 10.4%, a gauge of how efficiently it converts shareholder capital into profit. Return on assets is 2.6%, showing how much profit it generates from its asset base. NI trades at a trailing price-to-earnings ratio of 23.87, below the Utilities sector average of ~28x. Its free cash flow yield is -3.7%, a gauge of the cash the business throws off relative to its market value. A current ratio of 0.65 means current liabilities exceed short-term assets, a liquidity point worth watching. Its earnings yield is 4.3%, the inverse of the P/E and a quick read on earnings relative to price.

NiSource Inc. (NI) Valuation Context

Valued at $22.92B, NI is classified as a large-cap stock. Relative to its peer group, NI's quantitative score of 60/100 is roughly in line with the peer average of 63/100.

Company Profile

NiSource Inc. operates in the Regulated Gas industry within the Utilities sector. It is headquartered in Merrillville, US. The company is led by CEO Lloyd Yates. NI has traded publicly since 1962.

F-Score 7/9Financial Health

NiSource Inc.'s Piotroski F-Score is 7/9, a 9-point checklist of profitability, leverage and efficiency — signaling solid underlying fundamentals. Its Altman Z-Score of 0.87 places it in the distress zone, a signal of elevated financial risk.

FY2026 estForward Outlook

Wall Street analysts project NiSource Inc. revenue of about $6.94B for fiscal 2026, with EPS near $2.06. The estimate reflects 3 contributing analysts.

Net buyingInsider Activity

Over the past six months, NiSource Inc. insiders filed 30 SEC Form 4 transactions — 14 sales and 16 purchases. On net that is roughly 219K shares acquired (about $10.4M) — insiders putting money in tends to read as conviction.

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NI MoonshotScore

What Investors Ask About NiSource Inc. (NI) — Utilities

Disclaimer: This content is for informational purposes only and does not constitute investment advice. Always do your own research and consult a financial advisor.

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