Breaking Down NiSource Inc. (NI) Financial Health: Key Insights for Investors

You're looking at NiSource Inc. (NI) and trying to reconcile the utility's steady growth narrative with the capital-intensive reality of its business, which is a common puzzle for regulated sector investors. The truth is, the company is defintely executing on its growth strategy, with management narrowing its 2025 adjusted earnings per share (EPS) guidance to the upper half of the $1.85 to $1.89 range, which aligns with a robust forecast revenue of $6.3271 billion for the year. But here's the quick math: that growth is fueled by massive spending, including a consolidated capital expenditure plan of $28.0 billion, which now includes a significant investment in data center infrastructure, but that spending also keeps the debt-to-equity ratio high at around 1.77, a leverage point you can't ignore. So, while the stock offers a stable annualized dividend yield of about 2.6%, the real question is whether the regulatory environment will continue to support the rate base growth needed to service that debt and deliver the promised 6-8% annual EPS growth. The regulated utility story is simple: you get paid to invest, but you have to watch the balance sheet like a hawk.

Revenue Analysis

You need to know where NiSource Inc. (NI)'s money is actually coming from, and the quick answer is regulated utility growth, which is accelerating. The company's trailing twelve months (TTM) revenue ending September 30, 2025, hit an impressive $6.327 billion, marking a significant increase over the prior year.

This isn't a volatile tech stock; this is a regulated utility, so revenue streams are highly predictable and anchored in essential services. NiSource's primary revenue source is the delivery of natural gas and electricity to approximately 3.8 million customers across six states.

Segment Contribution and Core Services

NiSource operates through two main reportable segments, both of which are fully regulated. Understanding the split here shows you where the capital investment is flowing and which markets are driving growth. Columbia Operations is the larger natural gas distribution segment, while NIPSCO Operations covers both gas and electric services in northern Indiana.

While full-year 2025 revenue segment data isn't finalized, looking at the first quarter of 2025 gives us a clear picture of relative scale based on adjusted operating income, which is a solid proxy for contribution:

• Columbia Operations (Gas): $437.6 million in adjusted operating income.
• NIPSCO Operations (Gas & Electric): $303.3 million in adjusted operating income.

Here's the quick math: Columbia Operations accounted for about 59% of the total adjusted operating income between the two segments in Q1 2025, which tells you the natural gas side is still the bigger piece of the pie, but NIPSCO's electric business is a powerful growth engine. You can read more about the long-term strategy that drives these segments here: Mission Statement, Vision, & Core Values of NiSource Inc. (NI).

Growth Trends and Strategic Shifts

The year-over-year revenue growth is defintely a strong point. The TTM revenue of $6.327 billion through Q3 2025 represents a robust 19.62% increase compared to the prior year's TTM revenue. This kind of jump in a regulated utility is significant, and it's driven by two factors: rate base investments and a major new opportunity.

The most significant change in the revenue outlook is the strategic push into high-growth, regulated capital projects. The company announced a massive consolidated capital expenditure plan of $28.0 billion, which is a 45% increase over the prior five-year plan.

This growth is directly tied to the NIPSCO segment, which is capitalizing on the massive demand for data centers in the US. The plan includes approximately $7.0 billion in capital investment related to securing and serving these new data center loads.

What this estimate hides is that this investment locks in future regulated revenue streams, supporting an expected non-GAAP adjusted earnings per share (EPS) compound annual growth rate (CAGR) of 8% to 9% from 2026 through 2033. You are seeing the revenue base expand now, but the real payoff is the long-term stability this new, high-demand customer base provides.

The next concrete step for you is to monitor the NIPSCO data center regulatory approvals, as they are the key to realizing that $7.0 billion investment and the associated long-term revenue growth.

Profitability Metrics

You're looking for a clear picture of NiSource Inc.'s (NI) earning power, and the 2025 data shows a utility with solid, regulated profitability that is defintely improving its operational efficiency. The key takeaway is that the company's margins are healthy and generally exceed the sector average, driven by strategic capital investments and cost management.

For the trailing twelve months (TTM) ending November 2025, NiSource Inc. is demonstrating strong performance. The analyst consensus for the full 2025 fiscal year projects revenue around $6.3271 billion and net income of approximately $895.6 million. This translates to a net profit margin of about 14.15%, which is a steady, predictable return for a regulated utility.

Here is a breakdown of the core profitability margins, using the most recent TTM figures as of November 2025:

• Gross Profit Margin: The TTM figure is a robust 50.8%. This is a strong indicator of the company's ability to manage its direct costs, primarily the cost of purchased power and gas.
• Operating Profit Margin: This margin, which shows efficiency before interest and taxes, stands at 18.96% (TTM). This is a metric you want to watch closely.
• Net Profit Margin: The expected net margin for the fiscal year is around 14.1%, reflecting the stability of the regulated business model where returns are largely predictable.

The operational efficiency story here is compelling. NiSource Inc.'s TTM Gross Profit Margin of 50.8% handily beats the Utilities Sector average of 42.4%. This gap suggests superior cost management in its core operations. Also, the TTM Operating Margin of 18.96% is competitive, sitting above peers like Duke Energy at 17.10%, though it trails gas-focused Atmos Energy's higher 30.80% margin. The company's focus on AI-driven operational efficiency programs and digital asset management is paying off by reducing operating costs and supporting this margin expansion. That's a clear action item driving the numbers.

The trend is positive: analysts expect the net profit margin to climb further, targeting 16.5% within three years, fueled by infrastructure upgrades and digital efficiencies. However, it's important to note that the company's forecast annual revenue growth rate of 3.2% and earnings growth rate of 5.68% are both forecast to trail the US Utilities - Regulated Gas industry averages of 6.27% and 7.67%, respectively. So, while margins are strong, the pace of top-line growth is a bit slower than the industry. This is a classic trade-off in the regulated utility space: high stability and margin quality, but moderate growth. You can dive deeper into the strategic drivers behind these numbers in Breaking Down NiSource Inc. (NI) Financial Health: Key Insights for Investors.

Here's the quick math on profitability versus the sector average Gross Margin:

The company is doing a good job turning revenue into profit. Your action should be to monitor the execution of their $19.4 billion multi-year capital plan, as this investment is directly linked to the expected 6-8% annual earnings per share increase and the long-term margin target.

Debt vs. Equity Structure

You're looking at NiSource Inc. (NI) and wondering how a utility company with massive infrastructure needs balances its books. The short answer is: they rely heavily on debt, which is typical for the regulated utilities sector, but their recent figures show a manageable leverage posture compared to peers.

As of the quarter ending September 30, 2025, NiSource Inc. carried substantial debt, with $14.472 billion in long-term debt and $1.291 billion in short-term debt and capital lease obligations. This total debt load of approximately $15.76 billion is necessary to fund their significant capital investment plan, which includes an expected $19.4 billion in investments between 2025 and 2029 to support their generation transition strategy and other utility infrastructure upgrades.

Here's the quick math on their leverage:

The Debt-to-Equity (D/E) ratio is your clearest signal of financial leverage, showing how much debt is used to finance assets relative to shareholder funds. For the quarter ending September 30, 2025, NiSource Inc.'s D/E ratio was 1.40. To be fair, this ratio stood at 1.774 just a quarter earlier (June 30, 2025), but the current figure suggests a slight improvement in the capital structure.

• D/E Ratio: 1.40 (Sep 2025)
• Shareholders' Equity (June 2025): $8.882 billion
• Total Debt (Sep 2025): $15.76 billion

This 1.40 D/E ratio is right in line with or slightly below some of their key industry benchmarks, which is a good sign. For comparison, peers like Xcel Energy, Inc. and Alliant Energy Corp. were running D/E ratios of 1.590 and 1.582, respectively, as of mid-2025. Utilities are capital-intensive, so they defintely run higher leverage than, say, a tech company.

To fund its growth and manage existing obligations, NiSource Inc. has been active in the debt markets in 2025. In March 2025, they completed the issuance of $750.0 million of 5.850% senior unsecured notes due in 2055. This was followed by a larger $1.65 billion SEC-registered debt offering in June 2025, including $900 million of 5.350% Notes due 2035. These issuances are a clear indication of their preference for debt financing to fuel their capital program, especially with interest rates still elevated.

The company maintains investment-grade credit ratings, which is crucial for a utility to access capital cheaply. Their ratings are currently BBB+ (Stable) from S&P, Baa2 (Stable) from Moody's, and BBB (Stable) from Fitch. This stability helps keep their cost of debt low, even as they issue new notes.

While debt is the primary engine, NiSource Inc. also uses equity funding to balance the capital structure. For example, as of March 31, 2025, they had approximately $147.5 million of equity available for issuance under their At-The-Market (ATM) program. This allows them to opportunistically raise equity capital with less market disruption than a large secondary offering. It's a measured approach to ensure the D/E ratio stays within regulatory and rating agency comfort zones. For a deeper dive into the company's long-term philosophy, you can review their Mission Statement, Vision, & Core Values of NiSource Inc. (NI).

Liquidity and Solvency

You're looking at NiSource Inc. (NI)'s ability to cover its short-term bills, and honestly, the raw numbers look tight. But for a regulated utility, a low liquidity profile is often the norm, not a crisis signal. Still, we have to look closely at the data from the 2025 fiscal year to understand the risk.

The company's liquidity positions, measured by the Current Ratio and Quick Ratio, are low. The Current Ratio, which measures current assets against current liabilities, stood at 0.52 as of the third quarter of 2025. The Quick Ratio (or acid-test ratio), which strips out inventory-a less liquid asset-was even lower at 0.24. For most industries, anything below 1.0 is a red flag, suggesting a company can't cover its immediate obligations if they all came due at once. Here's the quick math: NiSource Inc. is structurally reliant on long-term assets (infrastructure) and predictable cash flow, not a large buffer of short-term cash. It's a utility, not a retailer.

Working capital-current assets minus current liabilities-shows a similar trend. The low ratios mean NiSource Inc. operates with negative working capital, a common trait for utilities because their revenue is stable and they can manage accounts payable (what they owe) without needing a huge cash cushion. This model works because of the regulated environment and consistent cash generation, but it leaves little room for error if there's a sudden, defintely unexpected expense or a regulatory lag in rate recovery.

• Current Ratio: 0.52 (Q3 2025)
• Quick Ratio: 0.24 (Q3 2025)
• Low ratios are typical for utilities, but still require monitoring.

The cash flow statement overview for the trailing twelve months (TTM) ending in mid-2025 paints the real picture of NiSource Inc.'s financial strategy. Cash flow from operations (OCF) was strong at approximately $2,062 million, reflecting the stable, regulated nature of the business. This is the company's lifeblood, the cash generated from selling electricity and gas.

But the Investing Cash Flow (ICF) is massively negative, clocking in at around -$4,185 million. This deficit is driven primarily by significant capital expenditures (CapEx) of approximately -$2,719 million, funding the necessary infrastructure upgrades and the shift to renewable energy. This is a growth-oriented utility, so the negative ICF is expected. It results in a negative Free Cash Flow (FCF) of roughly -$535.5 million, meaning the company's core operations don't fully fund its massive capital program. You can learn more about the investors funding this growth in Exploring NiSource Inc. (NI) Investor Profile: Who's Buying and Why?

So, how do they cover that FCF gap and the rest of the investing cash outflow? Financing Cash Flow (FCF) is the answer. For the first quarter of 2025 alone, net cash flows from financing activities were a positive $771.4 million, indicating a reliance on external capital. NiSource Inc. is actively using debt issuance (senior unsecured notes) and equity programs, like forward sale agreements, to fund its capital plan. This is a clear trade-off: high growth and CapEx mean high financing needs.

The primary liquidity strength is the predictable, regulated cash flow from operations. The main concern, however, is the structural reliance on capital markets to fund the difference between OCF and CapEx. If credit markets tighten or interest rates climb further, the cost of this necessary financing will rise, putting pressure on future earnings. The company's liquidity is not about immediate cash-on-hand, but about its ongoing, successful access to capital markets to fund its long-term, regulated investment cycle.

Valuation Analysis

You're looking at NiSource Inc. (NI) and asking the right question: Is the market pricing this utility correctly, or is there a disconnect? As of November 2025, the consensus suggests a slight undervaluation, but the premium ratios tell a more nuanced story about investor confidence in its regulated growth plan.

The stock has had a strong run, posting a robust one-year total shareholder return of 24.12%, with the price moving from a 52-week low of $35.36 to a high of $44.88. With the stock recently closing around $43.06 per share, it sits near the top of that range, which means we need to scrutinize the multiples to see if the valuation is justified.

Here's the quick math on key valuation multiples based on trailing 12-month (TTM) data for NiSource Inc. (NI) in late 2025:

• Price-to-Earnings (P/E) Ratio: The P/E is approximately 22.60. This is higher than the industry average of around 18.3, suggesting the market is paying a premium for NiSource Inc.'s stable, regulated earnings stream.
• Price-to-Book (P/B) Ratio: At 2.24, this is a solid number for a utility, indicating investors value the company at more than double its net asset value.
• Enterprise Value-to-EBITDA (EV/EBITDA): The ratio stands at approximately 13.13. This measures the total value of the company, including debt, against its core operating cash flow (Earnings Before Interest, Taxes, Depreciation, and Amortization). For a capital-intensive utility, this multiple is a crucial check on debt-adjusted valuation.

The elevated P/E ratio, in particular, signals that investors are defintely pricing in the company's expected earnings growth from its aggressive infrastructure modernization and clean energy transition programs. It's not a cheap stock, but you're paying for stability and projected growth.

Dividend Health and Analyst Consensus

For a utility like NiSource Inc. (NI), the dividend is a core part of the investment thesis. The company currently offers an annualized dividend of $1.12 per share, translating to a dividend yield of about 2.60%.

The dividend is well-covered, with a payout ratio of 59.57%. This means less than 60 cents of every dollar of earnings goes out as a dividend, leaving ample cash flow to reinvest in the business or pay down debt. That's a healthy cushion, especially for a regulated utility with predictable revenue.

Wall Street analysts are generally optimistic, giving NiSource Inc. (NI) a consensus rating of Moderate Buy. Their average 12-month price target is $45.78.

This target suggests a modest upside of roughly 6.29% from the recent price, implying the stock is slightly undervalued, but not by a wide margin. The highest price target is $50.00, and the lowest is $43.00.

To be fair, the market is already rewarding NiSource Inc. (NI) for its focus on regulated assets and its successful execution of major infrastructure upgrades. The valuation premium reflects this low-risk, steady growth profile. You can dive deeper into who is driving this demand by Exploring NiSource Inc. (NI) Investor Profile: Who's Buying and Why?

Here is a snapshot of the key metrics:

Risk Factors

You're looking at NiSource Inc. (NI) because it's a regulated utility, a classic defensive play, but even a low-beta stock (volatility is around 0.44) has serious headwinds. The biggest risks right now are the massive capital spending plan and the ever-present regulatory uncertainty across its six-state footprint.

Honestly, the sheer scale of the planned investment is the first thing that keeps me up at night. NiSource Inc. (NI) is on track to invest between $4.0 billion and $4.3 billion in 2025 alone, as part of a larger 2025-2029 capital expenditure (CAPEX) plan totaling $19.4 billion. That's a huge amount of capital to deploy efficiently, and any hiccup in project execution-like supply chain issues or labor shortages-will directly hit your expected rate base growth of 8% to 10%.

Operational and Strategic Execution Risks

The company is betting big on its energy transition and data center development, which introduces specific execution risks. The core of this strategy is the Northern Indiana Public Service Company LLC (NIPSCO) Genco initiative, which includes a substantial $6 billion to $7 billion capital investment for new power generation and battery storage to support data centers.

• Negative Free Cash Flow: NiSource Inc. (NI) has been grappling with negative free cash flow per share, recently reported at -$1.9. This makes the company highly dependent on external financing to fund its massive CAPEX plan.
• Aging Infrastructure: Despite the new investments, the company still faces operational risks from aging infrastructure, which can lead to service disruptions and increased maintenance costs.
• Supply Chain & Labor: Delays in project completion are a real threat due to supply chain disruptions and labor availability issues, impacting material costs and project timelines.

To be fair, they are trying to mitigate the operational side. They've been implementing AI across operations, which management claims has already resulted in over 60,000 hours of productivity gains since 2023. That's a clean one-liner on efficiency.

Regulatory and Financial Headwinds

For a regulated utility, regulatory risk is the most important external factor. NiSource Inc. (NI) operates across six states, and a change in political winds or the departure of key utility commissioners, as seen recently in Indiana, can materially affect project approval timelines.

The uncertainty surrounding the NIPSCO Genco initiative is a prime example. If settlement negotiations or approvals are delayed, the expected growth from the data center opportunities will slow down. Also, the company's valuation metrics are getting stretched; the P/E ratio is currently sitting around 22.96, close to its 3-year high of 25.04.

Here's the quick math: A high debt-to-equity ratio combined with a rising interest rate environment means their cost of debt-like the recent $750.0 million in 5.850% senior unsecured notes issued in March 2025-will increase. This reduces profitability and makes it defintely harder to sustain or grow the dividend, which is a key draw for utility investors. They use physical hedging to manage commodity price risk, which helps, but the interest rate exposure is a structural financial risk. If you want to dive deeper into the ownership structure, check out Exploring NiSource Inc. (NI) Investor Profile: Who's Buying and Why?

Growth Opportunities

You're looking at NiSource Inc. (NI) and trying to map out a long-term investment thesis, and honestly, the future is all about their massive capital spending plan. This isn't just routine maintenance; it's a regulated, multi-decade growth engine that gives you clear visibility on future earnings.

The direct takeaway is that NiSource Inc. is leveraging its regulatory framework to pour money into infrastructure, which directly translates into a projected annual adjusted earnings per share (EPS) growth of 6% to 8% through 2029. That's a steady, utility-grade return, and it's defintely worth your attention.

Capital Investment and Rate Base Expansion

The core of NiSource Inc.'s growth is its substantial capital expenditure (CapEx) plan. They are committing a base of $19.4 billion for the 2025-2029 period, which is designed to drive an 8%-10% annual growth in their rate base. Here's the quick math: a growing rate base, which is the value of assets they can earn a regulated return on, is the single most reliable way a utility company increases its profits.

More recently, they've extended and increased this to a consolidated CapEx plan of $28.0 billion, a 45% jump from their previous five-year plan. This expanded plan is expected to deliver a consolidated adjusted EPS compound annual growth rate of 8%-9% from 2026 to 2033. This is a regulated utility, so that kind of growth visibility is a powerful competitive advantage.

• 2025 Adjusted EPS Guidance: Upper half of $1.85 to $1.89.
• Long-Term EPS Growth: 6%-8% annually through 2029.
• Analyst 2025 Revenue Estimate: $6.22 billion.

Strategic Shifts: Renewables and Data Centers

Two key strategic initiatives are fueling this CapEx. First is the clean energy transition. NiSource Inc. is committed to retiring its coal-fired electric generation by 2028, replacing it with cleaner sources. As of the third quarter of 2025, they have already placed 1,950 MW of renewable projects and 101 MW of battery storage in service. This transition is a major component of the CapEx, with about 14% allocated to renewable energy generation.

Second, and this is the new big opportunity, is the strategic investment in the booming data center market. The new $28.0 billion CapEx plan includes nearly $7.0 billion specifically earmarked for data center investments. This is product innovation disguised as infrastructure spending, tapping into the explosive demand for AI and cloud computing energy needs. What this estimate hides, of course, is the regulatory risk in securing timely rate approvals for all these new, massive projects.

The CapEx breakdown shows where the money is going to drive growth:

Competitive Position and Actionable Insight

NiSource Inc.'s competitive advantage isn't a secret sauce; it's their status as a regulated utility serving approximately 3.2 million natural gas customers and 500,000 electric customers across six states. This regulated environment, coupled with successful rate cases-like the recent ones for Northern Indiana Public Service Company LLC Electric and Columbia Gas of Virginia-gives them the revenue uplift necessary to fund their growth plans. Their ability to secure these timely rate hikes is crucial for maintaining their high reinvestment rate.

For a deeper dive into the risks and financial metrics underpinning this growth, you should check out the full post at Breaking Down NiSource Inc. (NI) Financial Health: Key Insights for Investors.

Your next step: Portfolio Manager: Model the impact of the $7.0 billion data center CapEx on projected rate base growth for 2026-2030 by the end of the month.