Tags: NiSource | steady | returns | NI

NiSource: Steady Returns for Investors

By    |   Tuesday, 08 Nov 2011 03:34 PM

Diversified utility company NiSource (NI) has put together a business model to provide balanced energy to a diverse range of customers. The result has been steady returns for investors, a performance which the company plans to extend into the future.

NiSource provide energy services in three segments. Electric utility service is provided to more than 400,000 customers of NIPSCO Electric in northern Indiana. The company owns more than 3,300 MW of generating capacity. Natural gas utility service is provided to more than 3 million customers through utility companies in seven states set in a corridor from Kentucky to Massachusetts.

Natural gas transmission and storage provides those services with 15,000 miles of pipeline and 600 billion cubic feet of storage capacity. Transmission and storage services are provided on a fixed-fee basis.

For the first three quarters of 2011, NiSource generated revenue of $4.34 billion, up from $4.15 billion. Net income from continuing operations was $1 per share, up 12 percent from 89 cents in the first nine months of 2010. In the third quarter earnings statement, NiSource management stated that it expects full year earnings to be near the high end of the range guidance of $1.25 to $1.35. Earnings in 2010 were $1.22 per share.

Steady growth

Presentations by the company project annual earnings per share growth of 3 percent to 5 percent through a combination of regulatory rate increases and capital improvements. In recent years, earnings have been relatively flat and the 23 cents per share quarterly dividend rate has been in effect since 2004.

The dividend provides a current stock yield of about 4 percent, in line with other utility companies.

In recent years, the NI share price has outperformed the overall utility sector as tracked by the S&P Utilities index. In 2009, the stock beat the index by 28 percent, then by 12 percent in 2010.

Through the first nine months of 2011, NI was 15 percent better than the utilities index. In all three years, total return to investors was in excess of 20 percent. The market seems to like this stock.

The company next reports on Feb. 1.

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Diversified utility company NiSource (NI) has put together a business model to provide balanced energy to a diverse range of customers. The result has been steady returns for investors, a performance which the company plans to extend into the future. NiSource provide...
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Tuesday, 08 Nov 2011 03:34 PM
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