Analyzing Iberdrola (OTCMKTS:IBDRY) and NiSource (NYSE:NI)

Iberdrola (OTCMKTS:IBDRY) and NiSource (NYSE:NI) are both large-cap utilities companies, but which is the better stock? We will contrast the two companies based on the strength of their risk, dividends, valuation, institutional ownership, profitability, earnings and analyst recommendations.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Iberdrola and NiSource, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Iberdrola	1	2	2	0	2.20
NiSource	0	2	8	1	2.91

NiSource has a consensus target price of $45.78, indicating a potential upside of 8.54%. Given NiSource’s stronger consensus rating and higher possible upside, analysts plainly believe NiSource is more favorable than Iberdrola.

Dividends

Iberdrola pays an annual dividend of $2.98 per share and has a dividend yield of 3.7%. NiSource pays an annual dividend of $1.12 per share and has a dividend yield of 2.7%. Iberdrola pays out 82.5% 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 pays out 59.3% of its earnings in the form of a dividend. NiSource has raised its dividend for 14 consecutive years.

Institutional & Insider Ownership

0.0% of Iberdrola shares are held by institutional investors. Comparatively, 91.6% of NiSource shares are held by institutional investors. 0.2% of NiSource shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Risk & Volatility

Iberdrola has a beta of 0.79, suggesting that its share price is 21% less volatile than the S&P 500. Comparatively, NiSource has a beta of 0.6, suggesting that its share price is 40% less volatile than the S&P 500.

Profitability

This table compares Iberdrola and NiSource’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Iberdrola	12.10%	9.22%	3.49%
NiSource	14.15%	8.09%	2.66%

Earnings & Valuation

This table compares Iberdrola and NiSource”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Iberdrola	$48.42 billion	2.80	$6.07 billion	$3.61	22.46
NiSource	$6.33 billion	3.14	$760.40 million	$1.89	22.31

Iberdrola has higher revenue and earnings than NiSource. NiSource is trading at a lower price-to-earnings ratio than Iberdrola, indicating that it is currently the more affordable of the two stocks.

Summary

NiSource beats Iberdrola on 10 of the 18 factors compared between the two stocks.

About Iberdrola

Iberdrola, S.A. engages in the generation, transmission, distribution, and supply of electricity in Spain, the United Kingdom, the United States, Mexico, Brazil, Germany, France, and Australia. It generates electricity from renewable sources, such as onshore and offshore wind, hydro, photovoltaic, combined cycle gas, and conventional nuclear, as well as through batteries. The company is also involved in the purchase and sale of electricity and gas on wholesale markets; energy retail supply activities, such as gas and electricity, and other products and services, including hydrogen, as well as non-renewable generation; and production of green hydrogen. It has a total installed capacity of 62,871 MW. In addition, the company offers heat pumps, self-consumption, electric mobility, solar, etc. services to residential customers; and management of energy facilities, as well as supplies green H2, industrial heat, etc. to industrial customers. Iberdrola, S.A. was founded in 1840 and is based in Bilbao, Spain.

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.