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Why NiSource (NI) is a Great Dividend Stock Right Now
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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. However, when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
Cash flow can come from bond interest, interest from other types of investments, and of course, 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
NiSource (NI - Free Report) is headquartered in Merrillville, and is in the Utilities sector. The stock has seen a price change of 29.49% since the start of the year. The energy holding company is currently shelling out a dividend of $0.26 per share, with a dividend yield of 3.08%. This compares to the Utility - Electric Power industry's yield of 3.24% and the S&P 500's yield of 1.52%.
In terms of dividend growth, the company's current annualized dividend of $1.06 is up 6% from last year. In the past five-year period, NiSource has increased its dividend 5 times on a year-over-year basis 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%, meaning 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, which represents a year-over-year growth rate of 7.50%.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. However, not all companies offer a quarterly payout.
High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. Income investors must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. That said, they can take comfort from the fact that NI is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).
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Why NiSource (NI) is a Great Dividend Stock Right Now
Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. However, when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
Cash flow can come from bond interest, interest from other types of investments, and of course, 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
NiSource (NI - Free Report) is headquartered in Merrillville, and is in the Utilities sector. The stock has seen a price change of 29.49% since the start of the year. The energy holding company is currently shelling out a dividend of $0.26 per share, with a dividend yield of 3.08%. This compares to the Utility - Electric Power industry's yield of 3.24% and the S&P 500's yield of 1.52%.
In terms of dividend growth, the company's current annualized dividend of $1.06 is up 6% from last year. In the past five-year period, NiSource has increased its dividend 5 times on a year-over-year basis 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%, meaning 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, which represents a year-over-year growth rate of 7.50%.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. However, not all companies offer a quarterly payout.
High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. Income investors must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. That said, they can take comfort from the fact that NI is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).