NiSource's (NI) Systematic Long-Term Investments Bode Well

NiSource, Inc’s (NYSE:NI) consistent investments to strengthen its existing infrastructure and focus on clean energy are expected to drive its performance.

For 2019, earnings estimates were unchanged at $1.30 per share in the past 90 days. Additionally, the company delivered an average positive earnings surprise of 18.97% in the last four quarters.

We recently issued an updated research report on NiSource.

What’s Driving the Stock?

NiSource is working on long-term utility infrastructure modernization program. It will make capital investment of nearly $1.6-$1.7 billion in 2019 and $1.6-$2 billion annually in the 2020-2022 time period. The company continues to execute on an estimated $30-billion investment for long-term regulated utility infrastructure. The spending includes $20 billion for gas and $10 billion for electricity.

NiSource has a 100% regulated utility business model. More than 75% of its capital expenditures provide return within 12 months of investment. A visibility of return from ongoing investments will enable the company to deliver targeted earnings and dividend growth of 5-7% annually from 2019 through 2022.

NiSource is striving to lower emission levels during electricity generation. Through its Integrated Resource Plan (IRP), the company will attempt to lower carbon footprint and focus more on clean generation. Through the IRP, the company aims to retire nearly 80% of its remaining coal-fired generation in the next five years and all coal generation by 2028.

However, aging infrastructure, high debt levels and inconsistent weather conditions might deter NiSource’s growth.

Zacks Rank & Price Performance

The stock carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

In the past six months, shares of the company have increased 9.4% compared with the industry’s growth of 7.1%.

Stocks to Consider

Some better-ranked stocks from the same industry are Unitil Corporation (NYSE:UTL) , IDACORP, Inc (NYSE:IDA) and Alliant Energy Corporation (NASDAQ:LNT) . All the three stocks hold a Zacks Rank #2 (Buy).

Long-term earnings growth of Unitil, IDACORP and Alliant Energy is pegged at 4.40%, 3.80% and 5.50%, respectively.

The Zacks Consensus Estimate for 2019 earnings of Unitil, IDACORP and Alliant Energy inched up 0.8%, 0.2% and 0.4% to $2.32, $4.47 and $2.25 in the past 90 days, respectively.

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