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This is Why NiSource (NI) is a Great Dividend Stock
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Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on dividends. A dividend is the distribution of a company's earnings paid out to shareholders; it's often viewed by its dividend yield, a metric that measures a dividend as a percent of the current stock price. Many academic studies show that dividends account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
NiSource in Focus
Based in Merrillville, NiSource (NI - Free Report) is in the Utilities sector, and so far this year, shares have seen a price change of 18.08%. The energy holding company is paying out a dividend of $0.26 per share at the moment, with a dividend yield of 3.38% compared to the Utility - Electric Power industry's yield of 3.36% and the S&P 500's yield of 1.62%.
In terms of dividend growth, the company's current annualized dividend of $1.06 is up 6% from last year. NiSource has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 6.06%. Future dividend growth will depend on earnings growth as well as payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. NiSource's current payout ratio is 60%. This means it paid out 60% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, NI expects solid earnings growth. The Zacks Consensus Estimate for 2024 is $1.72 per share, representing a year-over-year earnings growth rate of 7.50%.
Bottom Line
Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. It's important to keep in mind that not all companies provide a quarterly payout.
Big, established firms that have more secure profits are often seen as the best dividend options, but it's fairly uncommon to see high-growth businesses or tech start-ups offer their stockholders a dividend. Income investors must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, NI presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #2 (Buy).
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This is Why NiSource (NI) is a Great Dividend Stock
Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on dividends. A dividend is the distribution of a company's earnings paid out to shareholders; it's often viewed by its dividend yield, a metric that measures a dividend as a percent of the current stock price. Many academic studies show that dividends account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
NiSource in Focus
Based in Merrillville, NiSource (NI - Free Report) is in the Utilities sector, and so far this year, shares have seen a price change of 18.08%. The energy holding company is paying out a dividend of $0.26 per share at the moment, with a dividend yield of 3.38% compared to the Utility - Electric Power industry's yield of 3.36% and the S&P 500's yield of 1.62%.
In terms of dividend growth, the company's current annualized dividend of $1.06 is up 6% from last year. NiSource has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 6.06%. Future dividend growth will depend on earnings growth as well as payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. NiSource's current payout ratio is 60%. This means it paid out 60% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, NI expects solid earnings growth. The Zacks Consensus Estimate for 2024 is $1.72 per share, representing a year-over-year earnings growth rate of 7.50%.
Bottom Line
Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. It's important to keep in mind that not all companies provide a quarterly payout.
Big, established firms that have more secure profits are often seen as the best dividend options, but it's fairly uncommon to see high-growth businesses or tech start-ups offer their stockholders a dividend. Income investors must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, NI presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #2 (Buy).