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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Nisource Inc. (XNYS:NI) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
NI
Name:
NISOURCE INC. (XNYS:NI)
Sector:
129.70M
Industry:
Utilities�Regulated Gas
CEO:
Mr. Joseph Hamrock
Total Employees:
7,272
Our Technological Advancement Rating
Our Rating:
B
Technological advancement compared to industry is 18.28% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF NISOURCE INC.(NI) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND UTILITIES�REGULATED GAS INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
29.55
One Month Price Target:
$29.61
Six Month Price Target :
$29.93
Likely Price in One Year's Time:
Ticker:
$30.31
Likely Trading Range Today Under (Normal Volatility)
$29.46
Price Upper limit ($) :
$29.66
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$28.36
This week:
$26.89
This month :
$24.23
Other Primary facts
Market Cap:
11.98B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
405.95M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
17.34%
-16.84%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$35.07
$32.54
$24.03
$26.56
Medium risk (<10%) entry points
Buy Call
Sell Call
$31.71
Buy Put:
Sell Put:
$31.17
$27.38
$27.93
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
NI
Sharpe Ratio:
1.24%
Comparison:
NI, is amongst the top 60% stocks with highest risk-adjusted returns
Sharpe ratio is -40.49% lower than the industry
& is -45.53% lower than the market/S&P 500 average
Average Returns/Yield of
NI
Daily returns:
0.03%
Weekly returns:
0.17%
Monthly returns:
0.67%
Yearly returns:
20.89%
Comparison of returns:
Average annual returns/yield (last 3 years) is -61.65% below industry average
Classification:
NI, is amongst the top 60% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.79
Statistical test of Returns:
NI has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
1.98%
Weekly Volatility:
4.42%
Monthly Volatility:
8.84%
Yearly Volatility:
30.61%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.11%
Volatility in last five trading days has been -43.58% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-4.02%
Weekly VaR:
-9.00%
Monthly VaR:
-18.00%
How Much Can the price of
NI
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-16%
Worst case (decline):
-62.34%
This translates to price declining to:
$24.96
This translates to price declining to:
$11.13
Severe Crash Probability
Risk of crash in next 6/12 months: Medium (<50%)
What is Value at Risk (VaR)?
Risk Fundamentals
NI is a 27.01% riskier investment compared to the market/S&P 500 & is 8.81% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -25.39% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
NI
Beta in relation to market/S&P 500--0.38
Expected beta in 1 year's time:
0.591
Expected beta in 3 year's time:
0.835
Unlevered (debt free) Beta:
0.186
Beta in relation to Nasdaq (XNAS):
0.501
Beta in relation to all global stocks::
0.77
Beta Comparison & Analysis
Beta of competitors/peers::
0.678
Beta is -43.74% lower than peers
Average Industry Beta:
0.86
Beta is -55.64% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
2.45%
Sustainable growth rate is -67.05% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.022
Alpha is -81.03% below industry average alpha yield
Alpha is 143% higher than market/& is unsustainably high
Analysis of Cost of Capital of
NI
Equity cost of capital:
0.058
Equity cost of capital is -36.25% below industry mean WACC
Unlevered (without debt) cost of capital:
2.81%
Before-tax cost of debt:
3.40%
After-tax cost of debt:
2.68%
Overall debt rating:
High AA grade (second highest grade)
Weighted average cost of capital (WACC):
2.68%
WACC is -27.57% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$12.88
Revenue growth rate per share of (3Y):
1.59
Annual revenue growth rate is -62.08% below industry average
EPS:
$1.52
Expected Annual growth rate of EPS (3Y):
13.01%
Expected future EPS growth rate is -44.82% lower than the Utilities�Regulated Gas industry
Free cash flow (FCF) per share:
-
Balance sheet equity growth per share: 27.39%
Equity growth rate per share is 1036.47% higher than the industry
Debt per share
$22.61
EBITDA per share
$4.82
Valuation Analysis Today of
NI
P/E Ratio:
19.22
P/E Ratio of Competitors/Peers:
17.22
P/E ratio is 11.63% higher than main peers & is 46.38% higher than the industry
Stock price/value with industry average P/E ratio: $19.96
NI is 48.04% overvalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $50.71
Present value of the expected future dividends only: $22.55
P/S (Price to Sales ratio):
2.29
Price to sales ratio is -32.67% below the industry mean
P/B (Price to book value ratio):
1.59
-
-
Net income growth rate (3Y):
-1148.04%
Net income growth rate is 287.90% higher than the average industry net income growth rate
Dividend Analysis
Dividend payout rate: 14.44%
Dividend yeild: 3.08%
Previous Dividend: $0.24
Previous adjusted dividend: $0.24
Previous Dividend: $0.91
Expected next dividend best case: $0.24
Expected next dividend worst case: $0.23
Average dividend payment (long-term): $0.22
Average dividend increase/decrease (growth rate) % per period: 1.66%
Expected next dividend payment date: 18/08/2022
Expected next dividend record date: 28/07/2022
Expected next dividend declaration date: 13/06/2022
Previous dividend payment date: 20/05/2022
Previous dividend record date: 29/04/2022
Previous dividend declaration date: 15/03/2022
Dividend History:
2022-04-28--$0.24
2021-10-28--$0.22
2021-04-29--$0.22
2022-02-07--$0.24
2021-07-29--$0.22
2021-02-08--$0.22
Dividend growth rate is -107.87% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
127.46%
Net debt to equity ratio:
133.90%
Debt to assets ratio:
37.68%
Net debt to assets ratio:
39.58%
Debt-to-asset ratio is -28.55% below industry average
Ability to repay debt:
Interest coverage ratio:
5.9
Interest coverage ratio is 7.42% more than industry average
Looking forward:
Debt growth rate:
0.57%
Annual debt growth is -99% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.08%
Analysis of Key Statistics
Correlation of price movement with the market:
0.617
Statistical significance of correlation:
NI has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.552
Stock price is 11.94% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.552
Correlation of price movement with Nasdaq (^IXIC):
0.055
Covariance of price movement with the market:
0.063
Kurtosis
19.437
Returns have severe fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are considerably more likely, compared to assets with normally distributed returns
Skewness of returns:
-0.32
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
NI
Gross Profit Margin Ratio:
162%
Operating Profit Margin Ratio:
22.46%
Operating profit margin is 154.44% higher than the industry
Net Profit Margin Ratio:
162%
Effective Tax Rate:
17.30%
Effective tax rate is -25.95% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
9.94%
Return on equity (ROE) is 16.66% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
2.94%
Return on assets (ROA) is 10.10% higher than the industry
Financial Leverage:
1.6x
Current Ratio:
0.72
Current ratio is -22.87% below industry average
Cash Conversion Cycle (days):
-98.4
Cash conversion cycle is -223.49% below industry average
The remaining useful life of property plant & equipment is: 1.7 years
Stock based compensation to net income ratio:
-
In-depth Efficiency Analysis
Revenue generated per employee:
718.8K
Each employee generates -56% less revenue than industry average revenue per employee
EBITDA generated per employee:
268.9K
Each employee generates -48% less EBITDA than industry average revenue per employee
Profit generated per employee:
98.5K
Each employee generates -60% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
17.8K
Each employee generates -120% less free cash flow than industry average revenue per employee
Assets/Capital per employee
3.1M
Each employee generates -120% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
NI
VISTRA CORP. (XNYS:VST)
NI-PB
KOREA ELECTRIC POWER CORPORATION (XNYS:KEP)
Enel Americas SA (OTCM:ENIAY)
Algonquin Power & Utilities Corp. (XNYS:AQN)
BROOKFIELD RENEWABLE PARTNERS UNT (XNYS:BEP)
UGI CORPORATION (XNYS:UGI)
CMS ENERGY CORPORATION (XNYS:CMS)
HUANENG POWER INTERNATIONAL, INC. (OTCM:HNPIY)
Current Analyst Ratings
Strong buy�17%
Buy�8%
Hold�33%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
5.23B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
3.11B
2.12B
-
-
-
-
1.05B
1.05B
4.00M
331.50M
756.10M
1.96B
1.17B
716.20M
875.00M
151.40M
716.20M
Statement of Cash Flow
Date:
Period:
192.70M
Differed Income Tax :
87.20M
Stock Based Compensation :
-
Change in Working Capital :
- 34400.00K
Accounts Receivables:
-
Other Working Capital:
- 24900.00K
Other Non-Cash Items:
- 97000.00K
Net Cash Provided by Operating Activities:
579.80M
Investments in PP&E:
-
Net Acquisitions:
-
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
114.50M
-
114.50M
1.06B
263.20M
434.50M
1.87B
18.12B
1.49B
-
239.90M
-
2.65B
22.49B
-
24.37B
628.50M
577.90M
313.50M
155.20M
1.23B
2.59B
9.18B
3.27B
14.24B
-
16.83B
4.10M
- 1372300.00K
- 85400.0K
7.11B
March 31, 2022 at 6:00:00 AM
4.16B
7.20B
24.04B
-
9.76B
9.6B
-
- 370400.00K
- 370400.00K
- 7300.00K
2.80M
-
- 103400.00K
- 66000.00K
- 173900.00K
-
35.50M
130.40M
94.90M
579.80M
- 450100.00K
129.70M
Our Proprietary Portfolio Rating
Our Rating:
B
Price Forecast/Expected Price in Next 5 Years of
NI
2023
2024
2025
2026
2027
$34.59
$35.48
$36.39
$37.32
$38.28