NRG Energy (NYSE:NRG) vs. NiSource (NYSE:NI) Head to Head Review

NRG Energy (NYSE:NRG) and NiSource (NYSE:NI) are both large-cap utilities companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, dividends, valuation, institutional ownership, earnings, profitability and risk.

Profitability

This table compares NRG Energy and NiSource’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NRG Energy	0.74%	70.67%	4.95%
NiSource	14.15%	8.31%	2.70%

Risk and Volatility

NRG Energy has a beta of 1.24, meaning that its stock price is 24% more volatile than the S&P 500. Comparatively, NiSource has a beta of 0.54, meaning that its stock price is 46% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations and price targets for NRG Energy and NiSource, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NRG Energy	0	4	10	1	2.80
NiSource	0	3	7	1	2.82

NRG Energy presently has a consensus target price of $199.69, suggesting a potential upside of 59.03%. NiSource has a consensus target price of $50.33, suggesting a potential upside of 6.71%. Given NRG Energy’s higher possible upside, equities analysts plainly believe NRG Energy is more favorable than NiSource.

Dividends

NRG Energy pays an annual dividend of $1.90 per share and has a dividend yield of 1.5%. NiSource pays an annual dividend of $1.20 per share and has a dividend yield of 2.5%. NRG Energy pays out 223.5% 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 59.7% of its earnings in the form of a dividend. NRG Energy has increased its dividend for 1 consecutive years and NiSource has increased its dividend for 14 consecutive years. NiSource is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider and Institutional Ownership

97.7% of NRG Energy shares are owned by institutional investors. Comparatively, 91.6% of NiSource shares are owned by institutional investors. 0.4% of NRG Energy shares are owned by company insiders. Comparatively, 0.4% of NiSource shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Earnings & Valuation

This table compares NRG Energy and NiSource”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NRG Energy	$30.71 billion	0.86	$864.00 million	$0.85	147.73
NiSource	$6.64 billion	3.40	$929.50 million	$2.01	23.47

NiSource has lower revenue, but higher earnings than NRG Energy. NiSource is trading at a lower price-to-earnings ratio than NRG Energy, indicating that it is currently the more affordable of the two stocks.

Summary

NRG Energy beats NiSource on 9 of the 17 factors compared between the two stocks.

About NRG Energy

NRG Energy, Inc., together with its subsidiaries, operates as an energy and home services company in the United States and Canada. It operates through Texas; East; West/Services/Other; Vivint Smart Home; and Corporate Activities segments. The company produces and sells electricity generated using coal, oil, solar, and battery storage; natural gas; and a cloud-based home platform, including hardware, software, sales, installation, customer service, technical support, and professional monitoring solutions. It offers retail electricity and energy management, line and surge protection products, HVAC installation, repair and maintenance, home protection products, carbon offsets, back-up power stations, portable power, portable solar, and portable lighting; retail services comprising demand response, commodity sales, energy efficiency, and energy management solutions; and system power, distributed generation, renewable and low-carbon products, carbon management and specialty services, backup generation, storage and distributed solar, and energy advisory services. In addition, the company trades in power, natural gas, and related commodities; environmental products; weather products; and financial products, including forwards, futures, options, and swaps. It offers its products and services under the NRG, Reliant, Direct Energy, Green Mountain Energy, and Vivint. It serves residential, commercial, government, industrial, and wholesale customers. NRG Energy, Inc. was founded in 1989 and is headquartered in Houston, Texas.

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.