NISOURCE INC (NI) Stock Fundamental Analysis
NYSE:NI - New York Stock Exchange, Inc. - US65473P1057 - Common Stock - Currency: USD
NI gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 31 industry peers in the Multi-Utilities industry. NI scores excellent on profitability, but there are concerns on its financial health. NI is valied quite expensively at the moment, while it does show a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year NI was profitable.
In the past year NI had a positive cash flow from operations.
NI had positive earnings in 4 of the past 5 years.
NI had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
NI's Return On Assets of 2.62% is on the low side compared to the rest of the industry. NI is outperformed by 68.00% of its industry peers.
NI's Return On Equity of 9.76% is in line compared to the rest of the industry. NI outperforms 56.00% of its industry peers.
NI has a Return On Invested Capital of 4.63%. This is amongst the best in the industry. NI outperforms 96.00% of its industry peers.
The Average Return On Invested Capital over the past 3 years for NI is below the industry average of 7.44%.
The last Return On Invested Capital (4.63%) for NI is above the 3 year average (4.05%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.62% | ||
| ROE | 9.76% | ||
| ROIC | 4.63% |
ROA(3y)2.42%
ROA(5y)1.82%
ROE(3y)8.79%
ROE(5y)6.55%
ROIC(3y)4.05%
ROIC(5y)4%
1.3 Margins
NI's Profit Margin of 14.63% is fine compared to the rest of the industry. NI outperforms 72.00% of its industry peers.
NI's Profit Margin has improved in the last couple of years.
With an excellent Operating Margin value of 27.66%, NI belongs to the best of the industry, outperforming 96.00% of the companies in the same industry.
NI's Operating Margin has been stable in the last couple of years.
NI has a better Gross Margin (77.16%) than 84.00% of its industry peers.
In the last couple of years the Gross Margin of NI has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 27.66% | ||
| PM (TTM) | 14.63% | ||
| GM | 77.16% |
OM growth 3Y9.04%
OM growth 5Y1.39%
PM growth 3Y7.76%
PM growth 5Y16.53%
GM growth 3Y3.45%
GM growth 5Y2.36%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so NI is destroying value.
The number of shares outstanding for NI has been increased compared to 1 year ago.
Compared to 5 years ago, NI has more shares outstanding
The debt/assets ratio for NI has been reduced compared to a year ago.
2.2 Solvency
Based on the Altman-Z score of 0.71, we must say that NI is in the distress zone and has some risk of bankruptcy.
NI has a Altman-Z score of 0.71. This is comparable to the rest of the industry: NI outperforms 44.00% of its industry peers.
NI has a Debt/Equity ratio of 1.53. This is a high value indicating a heavy dependency on external financing.
With a Debt to Equity ratio value of 1.53, NI perfoms like the industry average, outperforming 52.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.53 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 0.71 |
ROIC/WACC0.73
WACC6.3%
2.3 Liquidity
A Current Ratio of 0.52 indicates that NI may have some problems paying its short term obligations.
Looking at the Current ratio, with a value of 0.52, NI is doing worse than 92.00% of the companies in the same industry.
NI has a Quick Ratio of 0.52. This is a bad value and indicates that NI is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Quick ratio value of 0.45, NI is not doing good in the industry: 92.00% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.52 | ||
| Quick Ratio | 0.45 |
3. Growth
3.1 Past
NI shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 11.90%, which is quite good.
Measured over the past 5 years, NI shows a small growth in Earnings Per Share. The EPS has been growing by 5.80% on average per year.
Looking at the last year, NI shows a quite strong growth in Revenue. The Revenue has grown by 13.08% in the last year.
Measured over the past years, NI shows a small growth in Revenue. The Revenue has been growing by 0.93% on average per year.
EPS 1Y (TTM)11.9%
EPS 3Y7.72%
EPS 5Y5.8%
EPS Q2Q%15.29%
Revenue 1Y (TTM)13.08%
Revenue growth 3Y3.64%
Revenue growth 5Y0.93%
Sales Q2Q%27.95%
3.2 Future
The Earnings Per Share is expected to grow by 8.40% on average over the next years. This is quite good.
NI is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.22% yearly.
EPS Next Y10.3%
EPS Next 2Y8.8%
EPS Next 3Y8.61%
EPS Next 5Y8.4%
Revenue Next Year0.31%
Revenue Next 2Y2.78%
Revenue Next 3Y3.68%
Revenue Next 5Y5.22%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 21.46, which indicates a rather expensive current valuation of NI.
Based on the Price/Earnings ratio, NI is valued expensively inside the industry as 80.00% of the companies are valued cheaper.
When comparing the Price/Earnings ratio of NI to the average of the S&P500 Index (27.15), we can say NI is valued slightly cheaper.
Based on the Price/Forward Earnings ratio of 19.47, the valuation of NI can be described as rather expensive.
88.00% of the companies in the same industry are cheaper than NI, based on the Price/Forward Earnings ratio.
NI is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 21.60, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.46 | ||
| Fwd PE | 19.47 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, NI is valued a bit more expensive than 60.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 12.1 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates NI does not grow enough to justify the current Price/Earnings ratio.
The decent profitability rating of NI may justify a higher PE ratio.
PEG (NY)2.08
PEG (5Y)3.7
EPS Next 2Y8.8%
EPS Next 3Y8.61%
5. Dividend
5.1 Amount
NI has a Yearly Dividend Yield of 2.83%. Purely for dividend investing, there may be better candidates out there.
With a Dividend Yield of 2.83, NI pays less dividend than the industry average, which is at 3.37. 92.00% of the companies listed in the same industry pay a better dividend than NI!
NI's Dividend Yield is comparable with the S&P500 average which is at 2.42.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.83% |
5.2 History
The dividend of NI has a limited annual growth rate of 2.55%.
NI has paid a dividend for at least 10 years, which is a reliable track record.
NI has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)2.55%
Div Incr Years13
Div Non Decr Years20
5.3 Sustainability
NI pays out 56.96% of its income as dividend. This is a bit on the high side, but may be sustainable.
The dividend of NI is growing, but earnings are growing more, so the dividend growth is sustainable.
DP56.96%
EPS Next 2Y8.8%
EPS Next 3Y8.61%
40.34
+0.37 (+0.93%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryMulti-Utilities
Earnings (Last)
Earnings (Next)
Inst Owners97.22%
Inst Owner Change-2.14%
Ins Owners0.25%
Ins Owner Change5.83%
Market Cap18.99B
Analysts84.8
Price Target44.82 (11.11%)
Short Float %2.31%
Short Ratio2.34
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.83% |
Yearly Dividend1.07
Dividend Growth(5Y)2.55%
DP56.96%
Div Incr Years13
Div Non Decr Years20
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)2.45%
Min EPS beat(2)-1.04%
Max EPS beat(2)5.94%
EPS beat(4)3
Avg EPS beat(4)12.6%
Min EPS beat(4)-1.04%
Max EPS beat(4)22.96%
EPS beat(8)6
Avg EPS beat(8)7.93%
EPS beat(12)7
Avg EPS beat(12)3.73%
EPS beat(16)9
Avg EPS beat(16)3.47%
Revenue beat(2)1
Avg Revenue beat(2)0.52%
Min Revenue beat(2)-7.74%
Max Revenue beat(2)8.78%
Revenue beat(4)1
Avg Revenue beat(4)-2.28%
Min Revenue beat(4)-9.33%
Max Revenue beat(4)8.78%
Revenue beat(8)1
Avg Revenue beat(8)-9.33%
Revenue beat(12)5
Avg Revenue beat(12)-3.5%
Revenue beat(16)6
Avg Revenue beat(16)-3.22%
PT rev (1m)2.27%
PT rev (3m)6.21%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-1.51%
EPS NY rev (1m)0.05%
EPS NY rev (3m)0.34%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)3.51%
Revenue NY rev (1m)-0.94%
Revenue NY rev (3m)-2.57%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.46 | ||
| Fwd PE | 19.47 | ||
| P/S | 3.2 | ||
| P/FCF | N/A | ||
| P/OCF | 9.44 | ||
| P/B | 2.13 | ||
| P/tB | 2.56 | ||
| EV/EBITDA | 12.1 |
EPS(TTM)1.88
EY4.66%
EPS(NY)2.07
Fwd EY5.14%
FCF(TTM)-1.74
FCFYN/A
OCF(TTM)4.27
OCFY10.59%
SpS12.6
BVpS18.9
TBVpS15.74
PEG (NY)2.08
PEG (5Y)3.7
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.62% | ||
| ROE | 9.76% | ||
| ROCE | 5.68% | ||
| ROIC | 4.63% | ||
| ROICexc | 4.67% | ||
| ROICexgc | 4.92% | ||
| OM | 27.66% | ||
| PM (TTM) | 14.63% | ||
| GM | 77.16% | ||
| FCFM | N/A |
ROA(3y)2.42%
ROA(5y)1.82%
ROE(3y)8.79%
ROE(5y)6.55%
ROIC(3y)4.05%
ROIC(5y)4%
ROICexc(3y)4.17%
ROICexc(5y)4.07%
ROICexgc(3y)4.42%
ROICexgc(5y)4.34%
ROCE(3y)5.19%
ROCE(5y)5.04%
ROICexcg growth 3Y3.4%
ROICexcg growth 5Y-4.29%
ROICexc growth 3Y3.95%
ROICexc growth 5Y-3.9%
OM growth 3Y9.04%
OM growth 5Y1.39%
PM growth 3Y7.76%
PM growth 5Y16.53%
GM growth 3Y3.45%
GM growth 5Y2.36%
F-Score6
Asset Turnover0.18
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.53 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 5.04 | ||
| Cap/Depr | 266.93% | ||
| Cap/Sales | 47.68% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 74.49% | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.52 | ||
| Quick Ratio | 0.45 | ||
| Altman-Z | 0.71 |
F-Score6
WACC6.3%
ROIC/WACC0.73
Cap/Depr(3y)287.5%
Cap/Depr(5y)277.1%
Cap/Sales(3y)47.4%
Cap/Sales(5y)44.54%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)11.9%
EPS 3Y7.72%
EPS 5Y5.8%
EPS Q2Q%15.29%
EPS Next Y10.3%
EPS Next 2Y8.8%
EPS Next 3Y8.61%
EPS Next 5Y8.4%
Revenue 1Y (TTM)13.08%
Revenue growth 3Y3.64%
Revenue growth 5Y0.93%
Sales Q2Q%27.95%
Revenue Next Year0.31%
Revenue Next 2Y2.78%
Revenue Next 3Y3.68%
Revenue Next 5Y5.22%
EBIT growth 1Y21.47%
EBIT growth 3Y13.01%
EBIT growth 5Y2.33%
EBIT Next Year85.13%
EBIT Next 3Y30.96%
EBIT Next 5Y22.38%
FCF growth 1Y13.9%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y32.96%
OCF growth 3Y13.52%
OCF growth 5Y2.39%