Reviewing NiSource (NI) & Ameren Corporation (AEE)
NiSource (NYSE: NI) and Ameren Corporation (NYSE:AEE) are both mid-cap utilities companies, but which is the better business? We will compare the two businesses based on the strength of their valuation, risk, earnings, profitability, institutional ownership, dividends and analyst recommendations.
Insider & Institutional Ownership
82.0% of NiSource shares are owned by institutional investors. Comparatively, 69.8% of Ameren Corporation shares are owned by institutional investors. 0.4% of NiSource shares are owned by insiders. Comparatively, 0.4% of Ameren Corporation shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
Valuation & Earnings
This table compares NiSource and Ameren Corporation’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|NiSource||$4.75 billion||1.76||$1.40 billion||$0.86||29.91|
|Ameren Corporation||$6.06 billion||2.36||$2.44 billion||$2.86||20.57|
Ameren Corporation has higher revenue and earnings than NiSource. Ameren Corporation is trading at a lower price-to-earnings ratio than NiSource, indicating that it is currently the more affordable of the two stocks.
This is a summary of current ratings for NiSource and Ameren Corporation, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
NiSource currently has a consensus price target of $26.79, indicating a potential upside of 4.14%. Ameren Corporation has a consensus price target of $55.33, indicating a potential downside of 5.96%. Given NiSource’s stronger consensus rating and higher probable upside, research analysts plainly believe NiSource is more favorable than Ameren Corporation.
This table compares NiSource and Ameren Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
NiSource pays an annual dividend of $0.70 per share and has a dividend yield of 2.7%. Ameren Corporation pays an annual dividend of $1.76 per share and has a dividend yield of 3.0%. 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. Ameren Corporation pays out 61.5% of its earnings in the form of a dividend. Ameren Corporation has raised its dividend for 3 consecutive years. Ameren Corporation is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Volatility & Risk
NiSource has a beta of 0.36, meaning that its stock price is 64% less volatile than the S&P 500. Comparatively, Ameren Corporation has a beta of 0.36, meaning that its stock price is 64% less volatile than the S&P 500.
Ameren Corporation beats NiSource on 11 of the 16 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.
Ameren Corporation Company Profile
Ameren Corporation is a utility holding company. The Company’s subsidiaries include Ameren Missouri, Ameren Illinois and Ameren Transmission Company (ATXI). It operates through four segments. The Ameren Missouri segment includes all of the operations of Ameren Missouri. The Ameren Illinois Electric Distribution segment consists of the electric distribution business of Ameren Illinois. The Ameren Illinois Natural Gas segment consists of the natural gas business of Ameren Illinois. The ATXI segment consists of the aggregated electric transmission businesses of Ameren Illinois and ATXI. Ameren Missouri operates a rate-regulated electric generation, transmission, and distribution business and a rate-regulated natural gas distribution business in Missouri. Ameren Illinois operates rate-regulated electric distribution, electric transmission and natural gas distribution businesses in Illinois. ATXI operates a Federal Energy Regulatory Commission rate-regulated electric transmission business.
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