Critical Analysis: TXNM Energy (TXNM) and Its Competitors

TXNM Energy (NYSE:TXNM) is one of 105 publicly-traded companies in the “Electric services” industry, but how does it compare to its rivals? We will compare TXNM Energy to similar businesses based on the strength of its valuation, profitability, dividends, risk, earnings, analyst recommendations and institutional ownership.

Profitability

This table compares TXNM Energy and its rivals’ 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	1.32%	6.89%	1.24%

Dividends

TXNM Energy pays an annual dividend of $1.55 per share and has a dividend yield of 3.6%. 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 3.2% and pay out 73.5% of their earnings in the form of a dividend.

Institutional & Insider Ownership

91.7% of TXNM Energy shares are held by institutional investors. Comparatively, 58.0% of shares of all “Electric services” companies are held by institutional investors. 1.4% of TXNM Energy shares are held by insiders. Comparatively, 7.3% of shares of all “Electric services” companies are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

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 rivals have a beta of -1.00, meaning that their average stock price is 200% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and target prices for TXNM Energy and its rivals, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TXNM Energy	0	1	3	0	2.75
TXNM Energy Competitors	1058	4737	4595	91	2.35

TXNM Energy currently has a consensus price target of $47.75, suggesting a potential upside of 9.67%. As a group, “Electric services” companies have a potential upside of 4.02%. Given TXNM Energy’s stronger consensus rating and higher possible upside, equities research analysts clearly believe TXNM Energy is more favorable than its rivals.

Valuation & Earnings

This table compares TXNM Energy and its rivals gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
TXNM Energy	$1.84 billion	$88.35 million	47.85
TXNM Energy Competitors	$1,277.98 billion	$582.15 million	3.74

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

Summary

TXNM Energy beats its rivals 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.