Entering text into the input field will update the search result below

NiSource Inc.: A Solid Midwest Utility

Mar. 07, 2018 7:57 PM ETNiSource Inc. (NI)5 Comments
Hale Stewart profile picture
Hale Stewart


  • NiSource provides electricity and natural gas to northern Indiana.
  • The company has a solid history of generating cash from operations.
  • It has a higher debt/equity ratio than other utilities.

NiSource (Northern Indiana Public Service Company)(NYSE:NI), is the 7th largest diversified utility (out of 29) by market capitalization (it is currently $7.83 billion in size). It has the 9th highest P/E (58.02) and the 12th highest forward P/E (12.29). It ranks 14/29 based on its dividend yield, which is currently 3.36%.

Here is a map from FERC that shows the utilities' primary markets:

And here's a map from the company's website that shows all the states it operates in:

The company is divided into two operating segments: electric power and gas
distribution. It derives revenue from three sources:

  1. Gas distribution: this unit accounts for 42% of the company's revenue. It has approximately 2.6 million customers
  2. Gas transportation: this unit accounts for 21% of the company's revenue
  3. Electric power: this unit accounts for 37% of the company's revenue. It has approximately 469,000 customers.

Its asset mix indicates that the company is more of a gas distributor than electric provider:

This is obviously a function of geography: being in the north, the company is subject more to cold weather than warm.

The company's generation capabilities are coal-based: it has three coal-fired generating stations capable of 2,540 MW of generating capabilities. This could subject the company to more stringent regulation in the future. From its latest 10K:

On October 23, 2015, the EPA issued a final rule to regulate CO2 emissions from existing fossil-fuel EGUs under section 111(D) of the CAA. The final rule establishes national CO2 emission-rate standards that are applied to each state’s mix of affected EGUs to establish state-specific emission-rate and mass-emission limits. The final rule requires each state to submit a plan indicating how the state will meet the EPA's emission-rate or mass-emission limit, including possibly imposing reduction obligations on specific units. If a state does not submit a satisfactory plan, the EPA will impose a federal

This article was written by

Hale Stewart profile picture
Hale Stewart spent 5 years as a bond broker in the late 1990s before returning to law school in the early 2000s. He is currently a tax lawyer in Houston, Texas. He has an LLM in domestic and international taxation (MagnaCumLaude). He is the author of the book The Lifetime Income Security Solution. Follow me on Twitter at @originalbonddadYou can read his legal analysis on his law office's blog.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.