NiSource (NYSE:NI – Get Free Report) and Algonquin Power & Utilities (NYSE:AQN – Get Free Report) are both utilities companies, but which is the better business? We will contrast the two companies based on the strength of their analyst recommendations, earnings, risk, valuation, profitability, institutional ownership and dividends.
Earnings and Valuation
This table compares NiSource and Algonquin Power & Utilities”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| NiSource | $6.88 billion | 2.83 | $929.50 million | $1.88 | 21.58 |
| Algonquin Power & Utilities | $2.43 billion | 1.80 | $180.80 million | $0.19 | 29.89 |
Insider and Institutional Ownership
91.6% of NiSource shares are owned by institutional investors. Comparatively, 62.3% of Algonquin Power & Utilities shares are owned by institutional investors. 0.4% of NiSource shares are owned by company insiders. Comparatively, 0.1% of Algonquin Power & Utilities shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Risk and Volatility
NiSource has a beta of 0.55, suggesting that its share price is 45% less volatile than the S&P 500. Comparatively, Algonquin Power & Utilities has a beta of 0.7, suggesting that its share price is 30% less volatile than the S&P 500.
Profitability
This table compares NiSource and Algonquin Power & Utilities’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| NiSource | 13.20% | 7.95% | 2.57% |
| Algonquin Power & Utilities | 5.77% | 5.16% | 1.79% |
Analyst Ratings
This is a summary of recent recommendations and price targets for NiSource and Algonquin Power & Utilities, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| NiSource | 0 | 2 | 10 | 0 | 2.83 |
| Algonquin Power & Utilities | 0 | 5 | 6 | 0 | 2.55 |
NiSource currently has a consensus price target of $49.64, indicating a potential upside of 22.35%. Algonquin Power & Utilities has a consensus price target of $6.81, indicating a potential upside of 19.82%. Given NiSource’s stronger consensus rating and higher possible upside, equities research analysts plainly believe NiSource is more favorable than Algonquin Power & Utilities.
Dividends
NiSource pays an annual dividend of $1.20 per share and has a dividend yield of 3.0%. Algonquin Power & Utilities pays an annual dividend of $0.26 per share and has a dividend yield of 4.6%. NiSource pays out 63.8% of its earnings in the form of a dividend. Algonquin Power & Utilities pays out 136.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. NiSource has increased its dividend for 14 consecutive years.
Summary
NiSource beats Algonquin Power & Utilities on 14 of the 17 factors compared between the two stocks.
About NiSource
NiSource Inc., an energy holding company, operates as a regulated natural gas and electric utility company in the United States. It operates in two segments, Gas Distribution Operations and Electric Operations. The company distributes natural gas to approximately 3.3 million customers through approximately 55,000 miles of distribution main pipeline and the associated individual customer service lines; and 1,000 miles of transmission main pipeline in northern Indiana, Ohio, Pennsylvania, Virginia, Kentucky, and Maryland. It also generates, transmits, and distributes electricity to approximately 0.5 million customers in various counties in the northern part of Indiana, as well as engages in wholesale electric and transmission transactions. It owns and operates coal-fired electric generating stations in Wheatfield and Michigan City; combined cycle gas turbine in West Terre Haute; natural gas generating units in Wheatfield; hydro generating plants in Carroll County and White County; wind generating units in White County, Indiana; and solar generating units in Jasper County and White County. The company was formerly known as NIPSCO Industries, Inc. and changed its name to NiSource Inc. in April 1999. NiSource Inc. was founded in 1847 and is headquartered in Merrillville, Indiana.
About Algonquin Power & Utilities
Algonquin Power & Utilities Corp. is an investment holding company, which engages in energy generation and water distribution facilities. It operates through the Regulated Services Group and Renewable Energy Group segments. The Regulated Services Group segment owns and operates a portfolio of electric, natural gas, water distribution, and wastewater collection utility systems and transmission. The Renewable Energy Group segment focuses on operating a diversified portfolio of renewable and thermal electric generation assets. The company was founded on August 1, 1988 and is headquartered in Oakville, Canada.
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