Head-To-Head Survey: NiSource (NYSE:NI) & Algonquin Power & Utilities (NYSE:AQN)

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

Insider & Institutional Ownership

62.3% of Algonquin Power & Utilities shares are held by institutional investors. Comparatively, 91.6% of NiSource shares are held by institutional investors. 0.1% of Algonquin Power & Utilities shares are held by company insiders. Comparatively, 0.4% of NiSource shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Volatility and Risk

Algonquin Power & Utilities has a beta of 0.7, indicating that its stock price is 30% less volatile than the S&P 500. Comparatively, NiSource has a beta of 0.55, indicating that its stock price is 45% less volatile than the S&P 500.

Valuation and Earnings

This table compares Algonquin Power & Utilities and NiSource”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Algonquin Power & Utilities	$2.43 billion	1.81	$180.80 million	$0.19	30.18
NiSource	$6.64 billion	2.94	$929.50 million	$1.88	21.65

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

Dividends

Algonquin Power & Utilities pays an annual dividend of $0.26 per share and has a dividend yield of 4.5%. NiSource pays an annual dividend of $1.20 per share and has a dividend yield of 2.9%. Algonquin Power & Utilities pays out 136.8% 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 pays out 63.8% of its earnings in the form of a dividend. NiSource has raised its dividend for 14 consecutive years.

Analyst Ratings

This is a summary of current recommendations and price targets for Algonquin Power & Utilities and NiSource, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Algonquin Power & Utilities	0	5	6	0	2.55
NiSource	0	2	10	0	2.83

Algonquin Power & Utilities currently has a consensus target price of $6.81, suggesting a potential upside of 18.67%. NiSource has a consensus target price of $49.82, suggesting a potential upside of 22.38%. Given NiSource’s stronger consensus rating and higher possible upside, analysts plainly believe NiSource is more favorable than Algonquin Power & Utilities.

Profitability

This table compares Algonquin Power & Utilities and NiSource’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Algonquin Power & Utilities	5.77%	5.16%	1.79%
NiSource	13.20%	7.95%	2.57%

Summary

NiSource beats Algonquin Power & Utilities on 14 of the 17 factors compared between the two stocks.

About Algonquin Power & Utilities

Algonquin Power & Utilities Corp. is an investment holding company, which engages in energy generation and water distribution facilities. It operates through the Regulated Services Group and Renewable Energy Group segments. The Regulated Services Group segment owns and operates a portfolio of electric, natural gas, water distribution, and wastewater collection utility systems and transmission. The Renewable Energy Group segment focuses on operating a diversified portfolio of renewable and thermal electric generation assets. The company was founded on August 1, 1988 and is headquartered in Oakville, Canada.

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.