Normally I play with northern German countries, and I tend to switch on Lutheranism as soon as I can, for two reasons:
1) Money. You get a lot more.
2) Stability penalty for Lutheranism isn't really hard, as you can esaily manage it.
3) Also morale isn't a big problem, because you can send much more money to military tech, and so you can keep a good edge on your enemies. Futhermore, when you reach a certain tech level you get morale bonuses, that can lead quite soon your forces to the 'invincible' level, which is the maximum. So the bonus for Reform disappears after some time (which is quite realistic: reformed nations, especially Netherlands and England, fought a lot in the first years, but then they turned peaceful).
4) In northern Europe a lot of provinces are Lutheran, and I tend to assume the religion of the majority of my lands, for obvious reasons.