Financial Comparison: NiSource (NYSE:NI) and Entergy (NYSE:ETR)

Entergy (NYSE:ETR) and NiSource (NYSE:NI) are both large-cap utilities companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, valuation, earnings, institutional ownership, analyst recommendations, risk and dividends.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Entergy	14.26%	11.53%	2.70%
NiSource	14.15%	8.09%	2.66%

Dividends

Entergy pays an annual dividend of $2.56 per share and has a dividend yield of 2.7%. NiSource pays an annual dividend of $1.12 per share and has a dividend yield of 2.5%. Entergy pays out 63.2% of its earnings in the form of a dividend. NiSource pays out 59.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Entergy has raised its dividend for 10 consecutive years and NiSource has raised its dividend for 14 consecutive years.

Valuation & Earnings

This table compares Entergy and NiSource”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Entergy	$12.73 billion	3.38	$1.06 billion	$4.05	23.82
NiSource	$6.33 billion	3.31	$760.40 million	$1.89	23.24

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

Insider & Institutional Ownership

88.1% of Entergy shares are owned by institutional investors. Comparatively, 91.6% of NiSource shares are owned by institutional investors. 0.4% of Entergy shares are owned by company insiders. Comparatively, 0.2% of NiSource shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Entergy and NiSource, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Entergy	0	4	15	2	2.90
NiSource	0	2	8	1	2.91

Entergy currently has a consensus target price of $102.97, indicating a potential upside of 6.73%. NiSource has a consensus target price of $46.67, indicating a potential upside of 6.23%. Given Entergy’s higher probable upside, equities research analysts plainly believe Entergy is more favorable than NiSource.

Risk & Volatility

Entergy has a beta of 0.66, meaning that its stock price is 34% less volatile than the S&P 500. Comparatively, NiSource has a beta of 0.65, meaning that its stock price is 35% less volatile than the S&P 500.

Summary

Entergy beats NiSource on 14 of the 18 factors compared between the two stocks.

About Entergy

Entergy Corporation, together with its subsidiaries, engages in the production and retail distribution of electricity in the United States. It generates, transmits, distributes, and sells electric power in portions of Arkansas, Louisiana, Mississippi, and Texas, including the City of New Orleans; and distributes natural gas. It also engages in the ownership of interests in non-nuclear power plants that sell electric power to wholesale customers, as well as provides decommissioning services to other nuclear power plant owners. It generates electricity through gas, nuclear, coal, hydro, and solar power sources. The company sells energy to retail power providers, utilities, electric power co-operatives, power trading organizations, and other power generation companies. The company’s power plants have approximately 24,000 megawatts of electric generating capacity. It delivers electricity to 3 million utility customers in Arkansas, Louisiana, Mississippi, and Texas. Entergy Corporation was founded in 1913 and is headquartered in New Orleans, Louisiana.

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.