Why NiSource (NI) Stock Is Rising Today

NEW YORK (TheStreet) -- Shares of NiSource Inc (NI) are rising 4.43% to $40.29 in late morning trading after the energy company announced on Sunday its board approved plans to spin off its pipeline assets from its utilities business.

The company will separate into two publicly traded companies, and will list its natural gas pipeline division as Columbia Pipeline Group under the ticker "COLP" on the New York Stock Exchange.

The Indiana-based company said the separation is expected to occur in mid-2015.

Separately, TheStreet Ratings team rates NISOURCE INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

"We rate NISOURCE INC (NI) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, increase in net income, solid stock price performance and reasonable valuation levels. We feel these strengths outweigh the fact that the company shows low profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • NI's revenue growth has slightly outpaced the industry average of 7.2%. Since the same quarter one year prior, revenues rose by 11.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • NISOURCE INC has improved earnings per share by 8.7% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, NISOURCE INC increased its bottom line by earning $1.57 versus $1.35 in the prior year. This year, the market expects an improvement in earnings ($1.70 versus $1.57).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Multi-Utilities industry average. The net income increased by 9.1% when compared to the same quarter one year prior, going from $71.70 million to $78.20 million.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 26.06% over the past year, a rise that has exceeded that of the S&P 500 Index. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • You can view the full analysis from the report here: NI Ratings Report

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