Head to Head Review: Kenon (NYSE:KEN) versus NiSource (NYSE:NI)

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

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Kenon and NiSource, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kenon	0	1	0	0	2.00
NiSource	0	3	7	1	2.82

NiSource has a consensus price target of $50.33, suggesting a potential upside of 5.38%. Given NiSource’s stronger consensus rating and higher possible upside, analysts plainly believe NiSource is more favorable than Kenon.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Kenon	7.60%	3.17%	1.94%
NiSource	14.15%	8.31%	2.70%

Dividends

Kenon pays an annual dividend of $3.85 per share and has a dividend yield of 4.5%. NiSource pays an annual dividend of $1.20 per share and has a dividend yield of 2.5%. Kenon pays out 500.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. NiSource pays out 59.7% of its earnings in the form of a dividend. Kenon has raised its dividend for 2 consecutive years and NiSource has raised its dividend for 14 consecutive years.

Institutional and Insider Ownership

13.4% of Kenon shares are owned by institutional investors. Comparatively, 91.6% of NiSource shares are owned by institutional investors. 0.1% of Kenon shares are owned by insiders. Comparatively, 0.4% of NiSource shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Kenon and NiSource”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Kenon	$871.63 million	5.15	$66.27 million	$0.77	111.92
NiSource	$6.64 billion	3.45	$929.50 million	$2.01	23.76

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

Risk and Volatility

Kenon has a beta of 1.09, suggesting that its stock price is 9% more volatile than the S&P 500. Comparatively, NiSource has a beta of 0.57, suggesting that its stock price is 43% less volatile than the S&P 500.

Summary

NiSource beats Kenon on 14 of the 18 factors compared between the two stocks.

About Kenon

Kenon Holdings Ltd., through its subsidiaries, operates as an owner, developer, and operator of power generation facilities in Israel, the United States, and internationally. It operates through OPC Power Plants, CPV Group, and ZIM segments. The company engages in the generation and supply of electricity and energy; development, construction, and management of solar and wind energy, and conventional natural gas-fired power plants; and provision of container liner shipping services. It also operates a fleet of 150 vessels. Kenon Holdings Ltd. was incorporated in 2014 and is based in Singapore. Kenon Holdings Ltd. operates as a subsidiary of Ansonia Holdings Singapore B.V.

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.