Critical Analysis: NiSource (NYSE:NI) and Enel Chile (NYSE:ENIC)

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

Earnings and Valuation

This table compares NiSource and Enel Chile”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NiSource	$6.64 billion	3.42	$929.50 million	$2.01	23.57
Enel Chile	$4.66 billion	1.28	$537.63 million	$0.39	11.09

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

Volatility & Risk

NiSource has a beta of 0.57, suggesting that its share price is 43% less volatile than the S&P 500. Comparatively, Enel Chile has a beta of 1.06, suggesting that its share price is 6% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
NiSource	14.15%	8.31%	2.70%
Enel Chile	11.04%	9.50%	4.13%

Dividends

NiSource pays an annual dividend of $1.20 per share and has a dividend yield of 2.5%. Enel Chile pays an annual dividend of $0.06 per share and has a dividend yield of 1.4%. NiSource pays out 59.7% of its earnings in the form of a dividend. Enel Chile pays out 15.4% 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 raised its dividend for 14 consecutive years. NiSource is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of current ratings and price targets for NiSource and Enel Chile, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NiSource	0	3	7	1	2.82
Enel Chile	0	4	1	1	2.50

NiSource presently has a consensus price target of $50.33, indicating a potential upside of 6.25%. Enel Chile has a consensus price target of $4.65, indicating a potential upside of 7.51%. Given Enel Chile’s higher possible upside, analysts plainly believe Enel Chile is more favorable than NiSource.

Insider and Institutional Ownership

91.6% of NiSource shares are held by institutional investors. Comparatively, 3.2% of Enel Chile shares are held by institutional investors. 0.4% of NiSource shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

NiSource beats Enel Chile on 12 of the 17 factors compared between the two stocks.

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.

About Enel Chile

Enel Chile S.A., an electricity utility company, engages in the generation, transmission, and distribution of electricity in Chile. The company operates through Generation, and Distribution and Networks Segments. It generates electricity through various sources, such as hydroelectric, thermal, wind, solar, and geothermal power plants. It distributes electricity in various municipalities of the Santiago metropolitan region. The company also engages in the sale and transportation of natural gas, and provision of engineering consulting services. It serves residential, commercial, industrial, and other customers. The company was formerly known as Enersis Chile S.A. and changed its name to Enel Chile S.A. in October 2016. The company was incorporated in 2016 and is headquartered in Santiago, Chile. Enel Chile S.A. (SNSE:ENELCHILE) operates as a subsidiary of Enel SpA (BIT:ENEL).