Head to Head Comparison: Entergy (NYSE:ETR) & NiSource (NYSE:NI)

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

Analyst Ratings

This is a summary of recent recommendations for NiSource and Entergy, as reported by MarketBeat.

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

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

Dividends

NiSource pays an annual dividend of $1.12 per share and has a dividend yield of 2.5%. Entergy pays an annual dividend of $2.56 per share and has a dividend yield of 2.7%. NiSource pays out 59.3% of its earnings in the form of a dividend. Entergy pays out 63.2% 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. NiSource has increased its dividend for 14 consecutive years and Entergy has increased its dividend for 10 consecutive years.

Institutional & Insider Ownership

91.6% of NiSource shares are held by institutional investors. Comparatively, 88.1% of Entergy shares are held by institutional investors. 0.2% of NiSource shares are held by insiders. Comparatively, 0.5% of Entergy shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Profitability

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

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

Earnings & Valuation

This table compares NiSource and Entergy”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NiSource	$5.46 billion	3.84	$760.40 million	$1.89	23.24
Entergy	$11.88 billion	3.63	$1.06 billion	$4.05	23.82

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.

Volatility and Risk

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

Summary

Entergy beats NiSource on 13 of the 18 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 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.