Financial Contrast: NiSource (NYSE:NI) versus DTE Energy (NYSE:DTE)

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

Dividends

NiSource pays an annual dividend of $1.20 per share and has a dividend yield of 2.6%. DTE Energy pays an annual dividend of $4.66 per share and has a dividend yield of 3.3%. NiSource pays out 59.7% of its earnings in the form of a dividend. DTE Energy pays out 76.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. NiSource has increased its dividend for 14 consecutive years and DTE Energy has increased its dividend for 16 consecutive years. DTE Energy is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility and Risk

NiSource has a beta of 0.54, suggesting that its stock price is 46% less volatile than the S&P 500. Comparatively, DTE Energy has a beta of 0.39, suggesting that its stock price is 61% less volatile than the S&P 500.

Insider and Institutional Ownership

91.6% of NiSource shares are held by institutional investors. Comparatively, 76.1% of DTE Energy shares are held by institutional investors. 0.4% of NiSource shares are held by insiders. Comparatively, 0.6% of DTE Energy shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Valuation & Earnings

This table compares NiSource and DTE Energy”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	3.31	$929.50 million	$2.01	22.82
DTE Energy	$15.81 billion	1.88	$1.46 billion	$6.07	23.53

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

Analyst Ratings

This is a summary of current ratings and recommmendations for NiSource and DTE Energy, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NiSource	0	3	7	1	2.82
DTE Energy	0	4	9	1	2.79

NiSource presently has a consensus target price of $50.33, suggesting a potential upside of 9.75%. DTE Energy has a consensus target price of $156.25, suggesting a potential upside of 9.42%. Given NiSource’s stronger consensus rating and higher probable upside, equities research analysts plainly believe NiSource is more favorable than DTE Energy.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
NiSource	14.15%	8.31%	2.70%
DTE Energy	7.65%	12.37%	2.84%

Summary

DTE Energy beats NiSource 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 DTE Energy

DTE Energy Company engages in the utility operations. The company's Electric segment generates, purchases, distributes, and sells electricity to various residential, commercial, and industrial customers in southeastern Michigan. It generates electricity through coal-fired plants, hydroelectric pumped storage, and nuclear plants, as well as wind and solar assets. This segment owns and operates distribution substations and line transformers. The company's Gas segment purchases, stores, transports, distributes, and sells natural gas to various residential, commercial, and industrial customers throughout Michigan; and sells storage and transportation capacity. Its DTE Vantage segment offers metallurgical and petroleum coke to steel and other industries; and power generation, steam production, chilled water production, and wastewater treatment services, as well as air supplies compressed air to industrial customers. Its Energy Trading segment engages in power, natural gas, and environmental marketing and trading; structured transactions; and the optimization of contracted natural gas pipeline transportation and storage positions. The company was founded in 1849 and is based in Detroit, Michigan.