Analyzing E.On (OTCMKTS:ENAKF) & NiSource (NYSE:NI)

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

Valuation & Earnings

This table compares NiSource and E.On”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	3.04	$929.50 million	$1.88	22.37
E.On	N/A	N/A	N/A	($0.25)	-78.61

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

Institutional and Insider Ownership

91.6% of NiSource shares are owned by institutional investors. Comparatively, 25.1% of E.On shares are owned by institutional investors. 0.4% of NiSource shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
NiSource	13.20%	7.95%	2.57%
E.On	N/A	N/A	N/A

Analyst Ratings

This is a summary of current recommendations for NiSource and E.On, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NiSource	0	2	9	0	2.82
E.On	0	0	0	0	0.00

NiSource presently has a consensus target price of $49.70, suggesting a potential upside of 18.19%. Given NiSource’s stronger consensus rating and higher possible upside, analysts plainly believe NiSource is more favorable than E.On.

Dividends

NiSource pays an annual dividend of $1.20 per share and has a dividend yield of 2.9%. E.On pays an annual dividend of $0.60 per share and has a dividend yield of 3.0%. NiSource pays out 63.8% of its earnings in the form of a dividend. E.On pays out -238.1% 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. E.On is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

NiSource beats E.On on 12 of the 14 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 E.On

E.ON SE operates as an energy company in Germany, the United Kingdom, Sweden, the Netherlands, rest of Europe, and internationally. It operates through two segments, Energy Networks and Customer Solutions. The Energy Networks segment operates power and gas distribution networks, as well as provides maintenance, repairs, and related services. The Customer Solutions segment supplies power, gas, and heat, as well as with products and services that enhance energy efficiency to residential, small and medium-sized enterprises, large commercial and industrial, sales partners, and public entities. Additionally, it provides SmartSim, a software solution that allows renewable gases to be fed into gas grids; gas quality tracking solutions; GasPro, a mobile gas sample collector; metering solutions; and GasCalc, a software that calculates natural gases, LNG, and biogases properties. The company was founded in 1923 and is headquartered in Essen, Germany.