August 01, 2025 a 07:31 am
NI: Dividend Analysis - NiSource Inc.
NiSource Inc. exhibits a robust dividend profile characterized by over four decades of consistent payouts, reflecting financial resilience and investor commitment. The consistent yield and historical growth showcase reliability, though the negative free cash flow yield indicates underlying financial pressures. Caution is advised, as the current payout ratios illustrate an overreliance on earnings rather than free cash flow.
📊 Overview
NiSource Inc. operates in the Utilities sector with a dividend yield of 2.60%. Currently, shareholders receive USD 1.08 per share, benefiting from a steady 41-year dividend history without recent cuts or suspensions.
| Criteria | Value |
|---|---|
| Sector | Utilities |
| Dividend Yield | 2.60% |
| Current Dividend per Share | 1.08 USD |
| Dividend History | 41 years |
| Last Cut or Suspension | None |
📉 Dividend History
The long-standing dividend history is essential in establishing trust and investment stability, acting as an indicator of financial health and management efficacy.
| Year | Dividend per Share (USD) |
|---|---|
| 2025 | 0.84 |
| 2024 | 1.06 |
| 2023 | 1.00 |
| 2022 | 0.94 |
| 2021 | 0.88 |
📈 Dividend Growth
Dividend growth is pivotal for gauging the financial health and potential for future income increase, ensuring shareholder value enhancement over time.
| Time | Growth |
|---|---|
| 3 years | 6.40% |
| 5 years | 5.79% |
The average dividend growth is 5.79% over 5 years. This shows moderate but steady dividend growth.
🗣️ Payout Ratio
Payout ratios provide insight into a company’s dividend sustainability, with implications for financial strategy and stability.
| Metric | Ratio |
|---|---|
| EPS-based | 58.22% |
| Free cash flow-based | -81.57% |
The payout ratio of 58.22% based on EPS is within a safe range, however, the negative free cash flow-based payout ratio of -81.57% suggests potential risk in maintaining current dividend levels.
✅ Cashflow & Capital Efficiency
A strong cash flow and capital efficiency is vital for dividend sustainability, indicating a company's ability to fund its dividends, reinvest in business growth, and maintain financial stability.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | -5.16% | -6.43% | -7.11% |
| Earnings Yield | 4.55% | 6.47% | 7.20% |
| CAPEX to Operating Cash Flow | 1.48 | 1.37 | 1.56 |
| Stock-based Compensation to Revenue | 0.80% | 0.43% | 0.43% |
| Free Cash Flow / Operating Cash Flow Ratio | -48.36% | -36.73% | -56.31% |
The negative free cash flow yield across years indicates insufficient free cash flow to cover the dividend payouts, posing a risk to sustainability. Earnings yield provides a favorable contrast.
⚠️ Balance Sheet & Leverage Analysis
The balance sheet analysis directs attention to the company’s financial obligations and ability to manage liabilities, crucial for long-term solvency and shareholder security.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 1.61 | 1.71 | 1.54 |
| Debt-to-Assets | 43.92% | 45.46% | 43.62% |
| Debt-to-Capital | 61.65% | 63.08% | 60.62% |
| Net Debt to EBITDA | 5.39 | 5.37 | 5.43 |
| Current Ratio | 0.52 | 0.85 | 0.55 |
| Quick Ratio | 0.41 | 0.76 | 0.39 |
| Financial Leverage | 3.66 | 3.76 | 3.53 |
The company's capital structure suggests a reliance on debt, with a high net debt to EBITDA ratio signaling potential challenges in coverage and financial stability.
✅ Fundamental Strength & Profitability
Understanding profitability and underlying financial efficiency is instrumental in evaluating long-term business success and dividend capacity.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | 8.76% | 8.64% | 10.61% |
| Return on Assets | 2.39% | 2.30% | 3.01% |
| Margins: Net | 13.94% | 12.97% | 13.74% |
| Margins: EBIT | 27.97% | 23.89% | 22.71% |
| Margins: EBITDA | 46.99% | 40.17% | 36.56% |
| Margins: Gross | 51.47% | 45.20% | 38.47% |
| Research & Development to Revenue | 0% | 0% | 0% |
NiSource's profitability ratios reflect a stable operating performance, although ongoing improvements in margin management could enhance overall profitability.
📈 Price Development
🗣️ Dividend Scoring System
An assessment based on key dividend and financial metrics:
| Category | Score (1-5) | |
|---|---|---|
| Dividend Yield | 3 | |
| Dividend Stability | 5 | |
| Dividend Growth | 4 | |
| Payout Ratio | 2 | |
| Financial Stability | 3 | |
| Dividend Continuity | 4 | |
| Cashflow Coverage | 2 | |
| Balance Sheet Quality | 3 |
Total Score: 26/40
🗣️ Rating
In conclusion, NiSource Inc. offers a reliable dividend history coupled with moderate growth and satisfactory financial metrics, albeit with cautionary signals in free cash flow coverage. Investors may expect steady dividends; however, close monitoring of financial health remains essential.