Regulated Gas · NYSE
Current Price
$48.18
Intrinsic Value
Use the calculator below to estimate
Run a full DCF analysis on NiSource Inc. with auto-filled fundamentals, adjustable assumptions, and sensitivity heatmap.
NiSource Inc., an energy holding company, operates as a regulated natural gas and electric utility company in the United States. It operates through two segments, Gas Distribution Operations and Electric Operations. The company distributes natural gas to approximately 853,000 customers in northern Indiana, as well as approximately 2.4 million residential, commercial, and industrial customers in Ohio, Pennsylvania, Virginia, Kentucky, and Maryland. It operates approximately 54,600 miles of distribution main pipelines, as well as associated individual customer service lines; and 1,000 miles of transmission main pipelines. The company generates, transmits, and distributes electricity to approximately 483,000 customers in 20 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 with a capacity of 722 megawatts (MW) in Wheatfield and 455 MW in Michigan City; combined cycle gas turbine with a capacity of 563 MW in West Terre Haute; natural gas generating units with a capacity of 155 MW in Wheatfield; hydro generating plants with a capacity of 9 MW in Carroll County and 7 MW in White County; and wind generating units with a capacity of 102 MW and 302 MW in White County, Indiana. 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.
ROIC (TTM)
4.5%
ROE (TTM)
10.2%
FCF Yield
-1.82%
Based on trailing twelve-month data, NI shows a free cash flow per share of N/A and a ROIC of 4.5%, key inputs for stock valuation using the DCF method. The P/FCF ratio of N/A and FCF yield of -1.82% are important context metrics when evaluating NI's stock valuation relative to peers.
The intrinsic value of NI depends on assumptions about future growth rate, discount rate (WACC), and terminal value. A DCF model discounts projected free cash flows back to present value — small changes in WACC can shift the estimate by 20% or more, which is why sensitivity analysis is essential.
Whether NI is undervalued depends on comparing the DCF-derived intrinsic value to the current market price of $48.18. A positive margin of safety (intrinsic value above market price) suggests potential undervaluation, but the degree of confidence depends on the reliability of your growth and discount rate assumptions.
To perform a DCF valuation on NiSource Inc.: (1) Start with the trailing free cash flow per share as the base, (2) project future FCF growth over 5-10 years based on Regulated Gas industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting NI's risk profile, and (4) add a terminal value for cash flows beyond the projection period.
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For NiSource Inc., this means projecting how much free cash flow the Regulated Gas will produce over the next 5-10 years, then discounting those amounts to today's dollars. NI's ROIC of 4.5% suggests the company may face challenges generating returns above its cost of capital.
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For NI, the capital structure and equity risk premium determine WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%.
