Bubblegum Pink Skort vs. NiSource Inc. (NI)

In this article I’ll evaluate whether a bubblegum pink skort with a price tag of $30.00 or NiSource Inc. stock currently trading at a price of $27.98 represents the better buy.

Disclosure: Please note that some of the links below are affiliate links and at no additional cost to you, I may earn a commission. Know that I only recommend products that I personally stand behind. When you use one of my affiliate links, it helps me run this blog and keep all of this content free of charge for readers (like you). Please review my disclaimer policy for further information.

Bubblegum Pink Skort – $30.00

This skort is a favorite of mine. With built-in pockets, it’s hands down a summer closet staple for any girl on the go.

I’ll throw it on when I’m taking my dog out, making quick runs to the grocery store, or even when I’m departing on a trip and want to look cute strutting through the airport.

It has a super stretchy, breathable fabric that makes it perfect for lounging as well! I love pairing it with a simple black or white t-shirt for a relaxed, carefree vibe.

It also goes great with the white tennis sneakers I showcased in an earlier post.

This skort retails for $30.00. If you’re interested in purchasing one for yourself, please follow this link. Other colors are available as well.

NiSource Inc. (NI) Stock – $27.98

Company Profile

NiSource is a company I just recently came across. NiSource is an energy holding company that provides natural gas and electricity to customers in Indiana, Ohio, Pennsylvania, Virginia, Kentucky, and Maryland. The company operates more than 50,000 miles of distribution main pipelines and about 1,000 miles of transmission main pipelines. Formerly known as NIPSCO, the company changed its name to NiSource Inc. in April 1999 and was originally founded in 1847. Today, the company is headquartered in Merrillville, Indiana.

My first impression is that the trailing twelve-month dividend payout ratio is fairly high at 68.03%. Although this might initially seem like a good thing if you’re a dividend investor, it might also mean that the company is investing less of its earnings towards future growth. However, utility companies generally have higher dividend payout ratios than other industries. According to Dividend.com, utility companies, on average, maintain a payout ratio close to 60%. Being a bit over that average isn’t cause for concern in my opinion, but it’s definitely something to watch.

Other notable metrics include the P/E ratio of 19.34 and a P/B ratio of 1.98. It’s also trading in the middle of its 52 week low ($23.78) and its 52 week high ($31.87).

Income Statement Analysis

Now, let’s turn to the latest available financial statements, the Q1’23 10Q report. Based on the report, the company’s net income during the first 3 months of 2023 was $337.8 million. Compare this to net income of $431.3 million for the first 3 months of 2022. This represents a YOY decline of $93.5 million, or 21.7%.

The YOY decline in net income was attributable to higher expenses, partially offset by increased operating revenues. Among operating expenses, the cost of energy and depreciation and amortization increased. Also, interest expense increased as a result of the higher interest rate environment and increased borrowing.

Statement of Cash Flows Analysis

Turning to NiSource’s statements of cash flows, net cash flows from operating activities increased between the three months ended March 31 from $579.8 million in 2022 to $683.4 in 2023. A positive indicator for any investor! Moreover, the company immensely increased the cash used for investments from $370.4 million to $727.8 million. This seems to indicate the company is focused on its future growth. However, a good portion of this funding came from the issuance and sale of $750 million of 5.25% senior unsecured notes. At the time this article was posted, the company had a total debt to capital ratio of 54.6%.

Concluding Remarks on NI

Based on my analysis of NiSource Inc., I believe the company will continue to provide a healthy dividend for investors. Also, company management seems to be looking to grow the company by investing in new technologies. That’s great news if you’re an investor! I do, however, think the company’s growth potential is limited, since the utility sector generally experiences slower growth. Moreover, I don’t think this stock is trading at a bargain at a price of $27.98 per share. Needless to say, I have very mixed feelings about this stock. If you’re looking for a stable long-term investment, however, this company may deserve a second look.

Decision Time

So, would you rather purchase the bubblegum pink skort or NiSource stock? Which do you think provides the better value?

As a reminder, if you’d like to purchase the pink skort, please use this link. Also, use my code September20 to receive 20% at checkout.

* Ratios and financial metrics provided by Fidelity as of 7/27/2023, the date this article was written.

* Please review our Investment Disclaimer Policy. The Chic Capitalist is committed to providing independent equity research. At the time of publication, The Chic Capitalist and its affiliates do not own a direct financial interest in the aforementioned stock.