Financial Survey: NiSource (NYSE:NI) and Wec Acquisition Corp (TEG)

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

Dividends

NiSource pays an annual dividend of $0.70 per share and has a dividend yield of 2.7%. Wec Acquisition Corp does not pay a dividend. 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.

Analyst Recommendations

This is a summary of current ratings and recommmendations for NiSource and Wec Acquisition Corp, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NiSource 1 5 6 0 2.42
Wec Acquisition Corp 0 0 0 0 N/A

NiSource currently has a consensus target price of $25.86, suggesting a potential downside of 1.87%. Given NiSource’s higher possible upside, research analysts plainly believe NiSource is more favorable than Wec Acquisition Corp.

Insider & Institutional Ownership

82.9% of NiSource shares are owned by institutional investors. 0.3% of NiSource 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.

Profitability

This table compares NiSource and Wec Acquisition Corp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
NiSource 5.96% 9.17% 2.00%
Wec Acquisition Corp 11.28% 15.70% 4.69%

Valuation & Earnings

This table compares NiSource and Wec Acquisition Corp’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
NiSource $4.75 billion 1.81 $1.40 billion $0.86 30.64
Wec Acquisition Corp N/A N/A N/A N/A N/A

NiSource has higher revenue and earnings than Wec Acquisition Corp.

Summary

NiSource beats Wec Acquisition Corp on 6 of the 10 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.

Wec Acquisition Corp Company Profile

Integrys Energy Group, Inc. is an energy holding company, which provides regulated natural gas and electricity, non-regulated renewable energy, and compressed natural gas products and services. The Company operates through four segments: natural gas utility, electric utility, electric transmission investment, and holding company and other. The natural gas utility segment includes the operations of Minnesota Energy Resources Corporation, Michigan Gas Utilities Corporation, North Shore Gas Company, The Peoples Gas Light and Coke Company and Wisconsin Public Service Corporation (WPS). The electric utility segment includes the electric utility operations of WPS. The electric transmission investment segment includes its 34% interest in American Transmission Company LLC. The holding company and other segment include the operations of the Integrys Energy Group holding company, Integrys Transportation Fuels, LLC, WPS Power Development LLC and the Peoples Energy, LLC holding company.

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