Critical Analysis: TXNM Energy (TXNM) vs. Its Peers

TXNM Energy (NYSE:TXNM) is one of 104 publicly-traded companies in the “Electric services” industry, but how does it contrast to its peers? We will compare TXNM Energy to similar businesses based on the strength of its valuation, dividends, risk, earnings, analyst recommendations, institutional ownership and profitability.

Dividends

TXNM Energy pays an annual dividend of $1.55 per share and has a dividend yield of 3.7%. TXNM Energy pays out 170.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Electric services” companies pay a dividend yield of 3.4% and pay out 72.0% of their earnings in the form of a dividend.

Profitability

This table compares TXNM Energy and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
TXNM Energy	4.50%	10.15%	2.36%
TXNM Energy Competitors	1.26%	6.84%	1.22%

Analyst Recommendations

This is a breakdown of current recommendations and price targets for TXNM Energy and its peers, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TXNM Energy	0	1	3	0	2.75
TXNM Energy Competitors	1044	4578	4346	91	2.35

TXNM Energy presently has a consensus target price of $47.75, indicating a potential upside of 12.94%. As a group, “Electric services” companies have a potential upside of 7.11%. Given TXNM Energy’s stronger consensus rating and higher possible upside, research analysts clearly believe TXNM Energy is more favorable than its peers.

Insider and Institutional Ownership

91.7% of TXNM Energy shares are owned by institutional investors. Comparatively, 57.6% of shares of all “Electric services” companies are owned by institutional investors. 1.4% of TXNM Energy shares are owned by insiders. Comparatively, 7.5% of shares of all “Electric services” companies are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares TXNM Energy and its peers gross revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
TXNM Energy	$1.94 billion	$88.35 million	46.46
TXNM Energy Competitors	$75.19 billion	$560.75 million	2.43

TXNM Energy’s peers have higher revenue and earnings than TXNM Energy. TXNM Energy is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Volatility and Risk

TXNM Energy has a beta of 0.36, meaning that its stock price is 64% less volatile than the S&P 500. Comparatively, TXNM Energy’s peers have a beta of -1.05, meaning that their average stock price is 205% less volatile than the S&P 500.

Summary

TXNM Energy beats its peers on 10 of the 15 factors compared.

TXNM Energy Company Profile

TXNM Energy, Inc., through its subsidiaries, provides electricity and electric services in the United States. It operates through Public Service Company of New Mexico (PNM) and Texas-New Mexico Power Company (TNMP) segments. The PNM segment engages in the generation, transmission, and distribution of electricity. The segment owns and leases communications, office and other equipment, office space, vehicles, and real estate. It generates electricity using coal, natural gas and oil, and nuclear fuel and waste, as well as solar, wind, geothermal, and battery storage energy sources. The TNMP segment provides regulated transmission and distribution services. The segment also owns and leases vehicles, service facilities, and office locations throughout its service territory. The company serves residential, commercial, and industrial customers and end-users of electricity in New Mexico and Texas. The company was formerly known as PNM Resources, Inc and changed its name to TXNM Energy, Inc. in August 2024. TXNM Energy, Inc. was founded in 1882 and is based in Albuquerque, New Mexico.