PPL Corporation (NYSE: PPL) and NiSource (NYSE:NI) are both mid-cap utilities companies, but which is the better business? We will compare the two businesses based on the strength of their earnings, analyst recommendations, dividends, institutional ownership, valuation, profitability and risk.

Earnings & Valuation

This table compares PPL Corporation and NiSource’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
PPL Corporation $7.40 billion 3.67 $4.04 billion $2.39 16.56
NiSource $4.75 billion 1.86 $1.40 billion $0.86 31.52

PPL Corporation has higher revenue and earnings than NiSource. PPL Corporation 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

PPL Corporation has a beta of 0.49, meaning that its share price is 51% less volatile than the S&P 500. Comparatively, NiSource has a beta of 0.37, meaning that its share price is 63% less volatile than the S&P 500.

Dividends

PPL Corporation pays an annual dividend of $1.58 per share and has a dividend yield of 4.0%. NiSource pays an annual dividend of $0.70 per share and has a dividend yield of 2.6%. PPL Corporation pays out 66.1% of its earnings in the form of a dividend. NiSource pays out 81.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. PPL Corporation has increased its dividend for 5 consecutive years. PPL Corporation is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional & Insider Ownership

70.9% of PPL Corporation shares are held by institutional investors. Comparatively, 81.9% of NiSource shares are held by institutional investors. 0.4% of PPL Corporation shares are held by company insiders. Comparatively, 0.4% of NiSource shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
PPL Corporation 22.08% 15.96% 4.16%
NiSource 5.96% 9.17% 2.00%

Analyst Ratings

This is a summary of recent recommendations and price targets for PPL Corporation and NiSource, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
PPL Corporation 0 5 3 0 2.38
NiSource 0 5 7 0 2.58

PPL Corporation presently has a consensus price target of $38.36, indicating a potential downside of 3.11%. NiSource has a consensus price target of $26.43, indicating a potential downside of 2.51%. Given NiSource’s stronger consensus rating and higher possible upside, analysts plainly believe NiSource is more favorable than PPL Corporation.

Summary

PPL Corporation beats NiSource on 12 of the 17 factors compared between the two stocks.

About PPL Corporation

PPL Corporation (PPL) is a utility holding company. Through its subsidiaries, PPL delivers electricity to customers in the United Kingdom, Pennsylvania, Kentucky, Virginia and Tennessee; delivers natural gas to customers in Kentucky, and generates electricity from power plants in Kentucky. PPL operates through U.K. Regulated Segment, Kentucky Regulated Segment and Pennsylvania Regulated Segment. The U.K. Regulated Segment consists of PPL Global, which includes PPL WPD Limited’s (WPD) regulated electricity distribution operations, the results of hedging the translation of WPD’s earnings from British pound sterling into United States dollars, and certain costs, such as the United States income taxes, administrative costs and allocated financing costs. Kentucky Regulated segment consists of the operations of Louisville Gas and Electric Company (LG&E) and KU Energy LLC (LKE). The Pennsylvania Regulated segment consists of PPL Electric Utilities Corporation (PPL Electric).

About NiSource

NiSource Inc. is an energy holding company. The Company is engaged in the distribution of natural gas. The Company operates through two business segments: Gas Distribution Operations and Electric Operations. The Company’s Gas Distribution Operations segment provides natural gas service and transportation for residential, commercial and industrial customers in Ohio, Pennsylvania, Virginia, Kentucky, Maryland, Indiana and Massachusetts. As of December 31, 2016, the Company’s Electric Operations segment provided electric services in 20 counties in the northern part of Indiana. The Company’s electric operations segment generated, transmitted and distributed electricity through the Company’s subsidiary NIPSCO to approximately 466,000 customers in 20 counties in the northern part of Indiana and engaged in wholesale and transmission transactions, as of December 31, 2016. NIPSCO owned and operated three coal-fired electric generating stations, as of December 31, 2016.

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