Head-To-Head Comparison: NiSource (NI) & CMS Energy Corporation (CMS)
NiSource (NYSE: NI) and CMS Energy Corporation (NYSE:CMS) are both mid-cap utilities companies, but which is the better stock? We will contrast the two businesses based on the strength of their valuation, risk, earnings, institutional ownership, analyst recommendations, profitability and dividends.
Institutional and Insider Ownership
82.2% of NiSource shares are held by institutional investors. Comparatively, 85.9% of CMS Energy Corporation shares are held by institutional investors. 0.4% of NiSource shares are held by insiders. Comparatively, 0.7% of CMS Energy Corporation shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
This table compares NiSource and CMS Energy Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|CMS Energy Corporation||8.52%||12.98%||2.64%|
NiSource pays an annual dividend of $0.70 per share and has a dividend yield of 2.6%. CMS Energy Corporation pays an annual dividend of $1.33 per share and has a dividend yield of 2.8%. 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. CMS Energy Corporation pays out 66.8% of its earnings in the form of a dividend. CMS Energy Corporation has increased its dividend for 5 consecutive years. CMS Energy Corporation is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Valuation & Earnings
This table compares NiSource and CMS Energy 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||1.85||$1.40 billion||$0.86||31.33|
|CMS Energy Corporation||$6.51 billion||2.09||$2.06 billion||$1.99||24.29|
CMS Energy Corporation has higher revenue and earnings than NiSource. CMS Energy 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 recommendations and price targets for NiSource and CMS Energy Corporation, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|CMS Energy Corporation||0||4||4||0||2.50|
NiSource currently has a consensus target price of $26.43, suggesting a potential downside of 1.90%. CMS Energy Corporation has a consensus target price of $47.71, suggesting a potential downside of 1.29%. Given CMS Energy Corporation’s higher probable upside, analysts plainly believe CMS Energy Corporation is more favorable than NiSource.
Risk and Volatility
NiSource has a beta of 0.37, suggesting that its stock price is 63% less volatile than the S&P 500. Comparatively, CMS Energy Corporation has a beta of 0.16, suggesting that its stock price is 84% less volatile than the S&P 500.
CMS Energy Corporation beats NiSource on 14 of the 17 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.
CMS Energy Corporation Company Profile
CMS Energy Corporation is an energy company operating primarily in Michigan. The Company operates through three segments: electric utility, which consists of regulated activities associated with the generation, transmission and distribution of electricity in Michigan; gas utility, which consists of regulated activities associated with the transportation, storage and distribution of natural gas in Michigan, and enterprises, which consists of various subsidiaries engaging primarily in domestic independent power production. The Company is the parent holding company of various subsidiaries, including Consumers Energy Company (Consumers), an electric and gas utility company, and CMS Enterprises Company (CMS Enterprises), a domestic independent power producer. Consumers serves individuals and businesses operating in the alternative energy, automotive, chemical, metal, and food products industries, as well as a group of other industries.
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