NiSource has posted moderate annual dividend growth for the past six years as earnings have steadily jogged higher after spinning off the firm's natural gas pipelines business.
The pure-play regulated gas (~60% of earnings) and electric (~40%) utility, with a presence in six midwestern-centric states with mostly constructive regulatory bodies, serves over 3 million customers.
Source: NiSource Investor Presentation, November 2022
This accommodative operating environment has allowed NiSource to maintain a healthy payout ratio within its target 60% to 70% range and earn a BBB+ rated balance sheet.
Source: Simply Safe Dividends
Recognizing these steady results, solid dividend coverage, and a stable outlook, we are upgrading NiSource's Dividend Safety Score from Unsafe to Borderline Safe.
However, dividend growth may remain in the low to mid-single digit range, in line with earnings expectations.
We will continue to monitor the firm's regulatory landscape and investments in cleaner energy and will communicate any developments that could impact the dividend.
