NiSource Inc's Dividend Analysis

This article first appeared on GuruFocus.

Assessing the Sustainability and Growth of NiSource Inc's Upcoming Dividend Payment

NiSource Inc (NYSE:NI) recently announced a total dividend of $0.3 per share, with the ex-dividend date set for 2026-07-31. This includes a cash dividend of $0.3 per share, payable on 2026-08-20. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into NiSource Inc's dividend performance and assess its sustainability.

What Does NiSource Inc Do?

Warning! GuruFocus has detected 9 Warning Signs with NI. High Yield Dividend Stocks in Gurus' Portfolio This Powerful Chart Made Peter Lynch 29% A Year For 13 Years How to calculate the intrinsic value of a stock? Is NI fairly valued? Test your thesis with our free DCF calculator.

NiSource is one of the nation's largest natural gas distribution companies, serving 2.4 million customers across Kentucky, Maryland, Ohio, Pennsylvania, and Virginia. The company also provides gas and electric services to 1.4 million customers in Indiana. Its regulated electric utility owns 4 gigawatts of generation capacity, encompassing coal, natural gas, and renewable energy sources. This diversified utility footprint provides a stable revenue base, which is a foundational element for consistent dividend payments. The company's strategic focus on regulated operations helps mitigate business risk and supports long-term financial planning, making it an attractive option for income-focused investors.NiSource Inc's Dividend Analysis·us.finance.gurufocus

A Glimpse at NiSource Inc's Dividend History

NiSource Inc has maintained a consistent dividend payment record since 1989. Dividends are currently distributed on a quarterly basis, providing shareholders with a regular income stream. This long-standing commitment to returning capital to investors underscores the company's financial stability and disciplined capital allocation strategy.

NiSource Inc has increased its dividend each year since 2016. The stock is thus listed as a dividend achiever, an honor given to companies that have increased their dividend each year for at least the past 10 years. This achievement highlights the company's ability to generate consistent earnings growth and its dedication to rewarding shareholders. The chart below shows the annual Dividends Per Share for tracking historical trends.NiSource Inc's Dividend Analysis·us.finance.gurufocus

Breaking Down NiSource Inc's Dividend Yield and Growth

As of today, NiSource Inc currently has a 12-month trailing dividend yield of 2.59% and a 12-month forward dividend yield of 2.68%. The forward yield being higher than the trailing yield suggests an expectation of increased dividend payments over the next 12 months, which aligns with the company's track record of annual increases.

Story Continues

Over the past three years, NiSource Inc's annual dividend growth rate was 6.00%. Extended to a five-year horizon, this rate increased to 6.10% per year. And over the past decade, NiSource Inc's annual dividends per share growth rate stands at 4.70%. These consistent growth rates demonstrate the company's ability to outpace inflation and provide shareholders with a growing income stream over time.

Based on NiSource Inc's dividend yield and five-year growth rate, the 5-year yield on cost of NiSource Inc stock as of today is approximately 3.48%. This metric is particularly valuable for long-term investors, as it projects the potential return on their original investment based on projected dividend growth.NiSource Inc's Dividend Analysis·us.finance.gurufocus

The Sustainability Question: Payout Ratio and Profitability

To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2026-03-31, NiSource Inc's dividend payout ratio is 0.58, indicating that the company pays out 58% of its earnings as dividends. This leaves a comfortable cushion of retained earnings to support ongoing capital expenditures and operational needs.

NiSource Inc's profitability rank offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks NiSource Inc's profitability 6 out of 10 as of 2026-03-31, suggesting fair profitability. The company has reported net profit in 8 years out of the past 10, demonstrating resilience even during challenging economic cycles. This consistent profitability is a positive signal for dividend sustainability, as it indicates the company has a reliable earnings base to support its shareholder distributions.

Growth Metrics: The Future Outlook

To ensure the sustainability of dividends, a company must have robust growth metrics. NiSource Inc's growth rank of 6 out of 10 suggests that the company has a fair growth outlook. This ranking considers various factors, including revenue growth, earnings growth, and EBITDA expansion, to provide a holistic view of the company's future potential.

Revenue is the lifeblood of any company, and NiSource Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. NiSource Inc's revenue has increased by approximately 1.90% per year on average, a rate that outperforms approximately 51.86% of global competitors. This steady revenue growth is driven by ongoing infrastructure investments and rate base expansion, which are essential for a regulated utility.

The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, NiSource Inc's earnings increased by approximately 9.10% per year on average, a rate that outperforms approximately 61.54% of global competitors. This strong earnings growth, outpacing revenue growth, indicates improving operational efficiency and margin expansion.

Lastly, the company's 5-year EBITDA growth rate of 10.60% outperforms approximately 68.56% of global competitors. EBITDA growth is a key indicator of a company's underlying cash-generating ability, and this robust growth rate provides ample support for future dividend increases.

Next Steps: Evaluating Your Investment

NiSource Inc presents a compelling case for dividend investors, with a strong history of consistent payments and annual increases since 2016. The company's payout ratio of 0.58 is prudent, leaving room for reinvestment and future dividend growth. With a fair profitability rank and solid growth metrics, including a 10.60% 5-year EBITDA growth rate, NiSource appears well-positioned to maintain its dividend trajectory. However, investors should consider the regulatory environment and interest rate trends, which can impact utility stocks. As you evaluate NiSource Inc (NYSE:NI), ask yourself: does the current yield of 2.59% and projected growth align with your long-term income goals?

GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.

View Comments