Comparing Iberdrola (OTCMKTS:IBDSF) & NiSource (NYSE:NI)

Iberdrola (OTCMKTS:IBDSF) and NiSource (NYSE:NI) are both utilities companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, dividends, valuation, analyst recommendations, institutional ownership, profitability and earnings.

Insider & Institutional Ownership

16.5% of Iberdrola shares are held by institutional investors. Comparatively, 91.6% of NiSource shares are held by institutional investors. 0.4% of NiSource shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares Iberdrola and NiSource”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Iberdrola	N/A	N/A	N/A	$0.33	72.36
NiSource	$6.64 billion	3.21	$929.50 million	$2.01	22.15

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

Dividends

Iberdrola pays an annual dividend of $0.02 per share and has a dividend yield of 0.1%. NiSource pays an annual dividend of $1.20 per share and has a dividend yield of 2.7%. Iberdrola pays out 7.1% of its earnings in the form of a dividend. NiSource pays out 59.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. 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.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Iberdrola	N/A	N/A	N/A
NiSource	14.15%	8.31%	2.70%

Analyst Ratings

This is a breakdown of current recommendations for Iberdrola and NiSource, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Iberdrola	0	0	0	0	0.00
NiSource	0	3	9	0	2.75

NiSource has a consensus target price of $50.30, indicating a potential upside of 12.98%. Given NiSource’s stronger consensus rating and higher probable upside, analysts plainly believe NiSource is more favorable than Iberdrola.

Summary

NiSource beats Iberdrola on 12 of the 14 factors compared between the two stocks.

About Iberdrola

Iberdrola, S.A. engages in the generation, transmission, distribution, and supply of electricity in Spain, the United Kingdom, the United States, Mexico, Brazil, Germany, France, and Australia. It generates electricity from renewable sources, such as onshore and offshore wind, hydro, photovoltaic, combined cycle gas, and conventional nuclear, as well as through batteries. The company is also involved in the purchase and sale of electricity and gas on wholesale markets; energy retail supply activities, such as gas and electricity, and other products and services, including hydrogen, as well as non-renewable generation; and production of green hydrogen. It has a total installed capacity of 62,871 MW. In addition, the company offers heat pumps, self-consumption, electric mobility, solar, etc. services to residential customers; and management of energy facilities, as well as supplies green H2, industrial heat, etc. to industrial customers. Iberdrola, S.A. was founded in 1840 and is based in Bilbao, Spain.

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.