NiSource (NYSE:NI) and IDACORP (NYSE:IDA) Critical Review

NiSource (NYSE:NI) and IDACORP (NYSE:IDA) are both utilities companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, valuation, dividends, institutional ownership, earnings, risk and analyst recommendations.

Volatility and Risk

NiSource has a beta of 0.65, indicating that its share price is 35% less volatile than the S&P 500. Comparatively, IDACORP has a beta of 0.59, indicating that its share price is 41% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
NiSource	13.99%	8.07%	2.64%
IDACORP	17.84%	9.36%	3.25%

Dividends

NiSource pays an annual dividend of $1.20 per share and has a dividend yield of 2.6%. IDACORP pays an annual dividend of $3.52 per share and has a dividend yield of 2.5%. NiSource pays out 61.5% of its earnings in the form of a dividend. IDACORP pays out 59.7% 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 IDACORP has increased its dividend for 13 consecutive years. NiSource is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

91.6% of NiSource shares are owned by institutional investors. Comparatively, 89.1% of IDACORP shares are owned by institutional investors. 0.2% of NiSource shares are owned by company insiders. Comparatively, 0.5% of IDACORP shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of current recommendations and price targets for NiSource and IDACORP, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NiSource	0	3	9	0	2.75
IDACORP	1	1	8	0	2.70

NiSource presently has a consensus target price of $47.20, suggesting a potential upside of 1.87%. IDACORP has a consensus target price of $140.67, suggesting a potential upside of 0.58%. Given NiSource’s stronger consensus rating and higher probable upside, analysts plainly believe NiSource is more favorable than IDACORP.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NiSource	$6.64 billion	3.34	$929.50 million	$1.95	23.76
IDACORP	$1.81 billion	4.24	$323.47 million	$5.90	23.70

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

Summary

NiSource beats IDACORP on 10 of the 17 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 IDACORP

IDACORP, Inc., together with its subsidiaries, engages in the generation, transmission, distribution, purchase, and sale of electric energy in the United States. The company operates 17 hydropower generating plants located in southern Idaho and eastern Oregon; three natural gas-fired plants in southern Idaho; and interests in two coal-fired steam electric generating plants located in Wyoming and Nevada. As of December 31, 2023, it had approximately 4,762 pole-miles of high-voltage transmission lines; 23 step-up transmission substations located at power plants; 21 transmission substations; 11 switching stations; 30 mixed-use transmission and distribution substations; 186 energized distribution substations; and 29,714 pole-miles of distribution lines, and 131 MW of battery storage, as well as provides electric utility services to approximately 633,000 retail customers in southern Idaho and eastern Oregon. The company serves commercial and industrial customers, which involved in food processing, electronics and general manufacturing, agriculture, health care, government, and education. It also invests in housing and other real estate tax credit investments. IDACORP, Inc. was founded in 1915 and is headquartered in Boise, Idaho.