NiSource (NYSE: NI) and Black Hills Corporation (NYSE:BKH) are both mid-cap utilities companies, but which is the superior stock? We will compare the two businesses based on the strength of their profitability, dividends, risk, earnings, analyst recommendations, valuation and institutional ownership.
Earnings and Valuation
This table compares NiSource and Black Hills Corporation’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|NiSource||$4.75 billion||1.84||$1.40 billion||$0.86||31.15|
|Black Hills Corporation||$1.70 billion||2.16||$588.78 million||$2.38||28.88|
NiSource has higher revenue and earnings than Black Hills Corporation. Black Hills Corporation is trading at a lower price-to-earnings ratio than NiSource, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
82.2% of NiSource shares are owned by institutional investors. Comparatively, 94.4% of Black Hills Corporation shares are owned by institutional investors. 0.3% of NiSource shares are owned by insiders. Comparatively, 1.1% of Black Hills Corporation shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
NiSource pays an annual dividend of $0.70 per share and has a dividend yield of 2.6%. Black Hills Corporation pays an annual dividend of $1.78 per share and has a dividend yield of 2.6%. NiSource pays out 81.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Black Hills Corporation pays out 74.8% of its earnings in the form of a dividend. NiSource has raised its dividend for 47 consecutive years. NiSource is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Volatility and Risk
NiSource has a beta of 0.37, meaning that its stock price is 63% less volatile than the S&P 500. Comparatively, Black Hills Corporation has a beta of 0.82, meaning that its stock price is 18% less volatile than the S&P 500.
This is a breakdown of recent recommendations for NiSource and Black Hills Corporation, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Black Hills Corporation||0||0||5||0||3.00|
NiSource currently has a consensus price target of $26.43, suggesting a potential downside of 1.35%. Black Hills Corporation has a consensus price target of $73.40, suggesting a potential upside of 6.79%. Given Black Hills Corporation’s stronger consensus rating and higher possible upside, analysts clearly believe Black Hills Corporation is more favorable than NiSource.
This table compares NiSource and Black Hills Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Black Hills Corporation||7.71%||10.48%||2.84%|
Black Hills Corporation beats NiSource on 11 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.
Black Hills Corporation Company Profile
Black Hills Corporation is a holding company. The Company is an integrated energy company, which is focused primarily on regulated utilities. The Company operates through segments, including Electric Utilities, Gas Utilities, Power Generation, Mining, Oil and Gas, and Corporate. As of December 31, 2016, the Electric Utilities segment generated, transmitted and distributed electricity to approximately 208,500 customers in South Dakota, Wyoming, Colorado and Montana. The Gas Utilities Segment includes the natural gas operations of Cheyenne Light. The Power Generation segment produces electric power from its generating plants and sells the electric capacity and energy principally to its utilities under long-term contracts. The Mining segment operates through its Wyodak Resources Development Corp. (WRDC) subsidiary. The Company’s Oil and Gas segment acquires, explores for, develops and produces natural gas and crude oil in the United States primarily in the Rocky Mountain region.
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