NiSource Boosts Shareholder Value With 5.7% Dividend Hike

NiSource NI announced that its board of directors has increased dividends by 5.7%. The new quarterly dividend will be 28 cents per share compared with the previous quarter’s 26.5 cents. The new dividend will be payable on Feb. 20, 2025, to stockholders of record as of Feb. 3, 2025.The increased dividend rate resulted in an annualized dividend of $1.12 per share compared with the previous level of $1.06. The company expects to deliver a 9-11% annual return to shareholders over the long term. The current dividend yield is 2.82%, higher than the Zacks S&P 500 composite's average of 1.18%.Can NI Stock Sustain Dividend Hikes?The company is working on a long-term utility infrastructure modernization program. NiSource projects an investment of $19.3 billion for the 2025-2029 period. It expects an annual rate base growth of 8-10% during 2025-2029, driven by its capital expenditures.NI’s planned regulated investments should further improve the reliability and safety of its services and provide efficient electric and natural gas services to its increasing customer base. More than 75% of NiSource’s capital expenditure starts providing returns in less than 18 months of investment.NiSource’s earnings are benefiting from the new electric and gas rates that came into effect in the previous years. The company is also gaining from its cost-saving initiatives and expects to lower operation and maintenance (O&M) expenses. These cost-saving measures should boost its margins over the long term.NI’s project Apollo achieved its goal of more than $50 million of cost savings initiatives in 2023. It observed and incorporated efficiency by performing safer, better, more efficient and low-cost operations. The project is expected to maintain flat O&M expenses through the five-year plan duration.NiSource’s growth prospects and ability to further enhance its performance indicate that management will have enough funds to sustain its shareholder-friendly initiatives in the future.Utilities’ Legacy of Dividend PaymentCompanies involved in utility services generally have stable operations and earnings. Consistent performance, regulated returns and the ability to generate cash flows allow utilities to reward shareholders with regular dividends.In the past few months, ONE Gas OGS, WEC Energy Group WEC and The York Water Company YORW have raised their quarterly dividend rate by 1%, 6.9% and 4%, respectively.The Zacks Consensus Estimate for ONE Gas’ 2025 earnings per share implies an improvement of 9.7% year over year. OGS’ current dividend yield is 3.81%.The Zacks Consensus Estimate for WEC Energy’s 2025 sales indicates an improvement of 5.6% year over year. WEC’s current dividend yield is 3.43%.The Zacks Consensus Estimate for York Water’s 2025 sales implies an improvement of 5.3% year over year. YORW’s current dividend yield is 2.91%.NI’s Stock Price PerformanceIn the past three months, shares of the company have risen 6.6% against the industry’s decline of 9.4%.  Image Source: Zacks Investment ResearchNI’s Zacks RankThe company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Zacks Names #1 Semiconductor StockIt's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report NiSource, Inc (NI): Free Stock Analysis Report WEC Energy Group, Inc. (WEC): Free Stock Analysis Report The York Water Company (YORW): Free Stock Analysis Report ONE Gas, Inc. (OGS): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks