Head-To-Head Survey: DTE Energy (NYSE:DTE) vs. NiSource (NYSE:NI)

DTE Energy (NYSE:DTE) and NiSource (NYSE:NI) are both large-cap utilities companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, earnings, dividends, profitability, analyst recommendations, valuation and risk.

Dividends

DTE Energy pays an annual dividend of $4.66 per share and has a dividend yield of 3.5%. NiSource pays an annual dividend of $1.20 per share and has a dividend yield of 2.7%. DTE Energy pays out 73.7% of its earnings in the form of a dividend. NiSource pays out 63.8% 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. DTE Energy has increased its dividend for 16 consecutive years and NiSource has increased its dividend for 14 consecutive years. DTE Energy is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
DTE Energy	8.00%	12.19%	2.74%
NiSource	13.20%	7.95%	2.57%

Institutional and Insider Ownership

76.1% of DTE Energy shares are held by institutional investors. Comparatively, 91.6% of NiSource shares are held by institutional investors. 0.6% of DTE Energy 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, hedge funds and endowments believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares DTE Energy and NiSource”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
DTE Energy	$16.46 billion	1.67	$1.46 billion	$6.32	20.89
NiSource	$6.64 billion	3.20	$929.50 million	$1.88	23.55

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

Volatility and Risk

DTE Energy has a beta of 0.36, suggesting that its stock price is 64% less volatile than the S&P 500. Comparatively, NiSource has a beta of 0.55, suggesting that its stock price is 45% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations for DTE Energy and NiSource, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
DTE Energy	0	6	9	1	2.69
NiSource	0	2	13	0	2.87

DTE Energy presently has a consensus target price of $149.07, suggesting a potential upside of 12.94%. NiSource has a consensus target price of $48.68, suggesting a potential upside of 9.96%. Given DTE Energy’s higher possible upside, research analysts plainly believe DTE Energy is more favorable than NiSource.

Summary

DTE Energy beats NiSource on 10 of the 18 factors compared between the two stocks.

About DTE Energy

DTE Energy Company engages in the utility operations. The company's Electric segment generates, purchases, distributes, and sells electricity to various residential, commercial, and industrial customers in southeastern Michigan. It generates electricity through coal-fired plants, hydroelectric pumped storage, and nuclear plants, as well as wind and solar assets. This segment owns and operates distribution substations and line transformers. The company's Gas segment purchases, stores, transports, distributes, and sells natural gas to various residential, commercial, and industrial customers throughout Michigan; and sells storage and transportation capacity. Its DTE Vantage segment offers metallurgical and petroleum coke to steel and other industries; and power generation, steam production, chilled water production, and wastewater treatment services, as well as air supplies compressed air to industrial customers. Its Energy Trading segment engages in power, natural gas, and environmental marketing and trading; structured transactions; and the optimization of contracted natural gas pipeline transportation and storage positions. The company was founded in 1849 and is based in Detroit, Michigan.

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.