Argus Calls NiSource Shares Fully Valued, Maintains Hold Rating

NiSource Inc. NI shares have appreciated 50 percent over the past 12 months, despite the various management changes, which Argus’ Jim Kelleher believes demonstrates “strong investor confidence in the company.”

Kelleher maintains a Hold rating on the company.

Stock Fully Valued

According to the Argus report, “Utilities have outperformed in 2016 as the Federal Reserve has backed away from further interest rate hikes and as international rates have declined.”

The company has recently completed a corporate restructuring that led to the spinoff of its pipeline group subsidiary and the appointment of a new CEO.

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NiSource has also announced a 6.5 percent increase in its quarterly dividend to $0.165, or $0.66 annually.

Kelleher believes the company’s balance sheet is stable and would be able to support he current dividend, which yields approximately 2.5 percent.

“As such, the NI shares appear fully valued and priced for this lower rate scenario, adding risk should rates begin to rise,” the analyst mentioned.

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