NRG Energy (NYSE:NRG) & TXNM Energy (NYSE:TXNM) Financial Analysis

NRG Energy (NYSE:NRG) and TXNM Energy (NYSE:TXNM) are both utilities companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, earnings, risk, profitability, valuation, analyst recommendations and dividends.

Analyst Recommendations

This is a breakdown of recent ratings for NRG Energy and TXNM Energy, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NRG Energy	0	3	4	0	2.57
TXNM Energy	0	2	3	0	2.60

NRG Energy currently has a consensus price target of $102.71, indicating a potential upside of 9.06%. TXNM Energy has a consensus price target of $52.00, indicating a potential upside of 7.28%. Given NRG Energy’s higher possible upside, analysts plainly believe NRG Energy is more favorable than TXNM Energy.

Dividends

NRG Energy pays an annual dividend of $1.63 per share and has a dividend yield of 1.7%. TXNM Energy pays an annual dividend of $1.63 per share and has a dividend yield of 3.4%. NRG Energy pays out 41.0% of its earnings in the form of a dividend. TXNM Energy pays out 84.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Valuation and Earnings

This table compares NRG Energy and TXNM Energy”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NRG Energy	$28.12 billion	0.68	-$202.00 million	$3.98	23.66
TXNM Energy	$1.91 billion	2.29	$88.35 million	$1.92	25.24

TXNM Energy has lower revenue, but higher earnings than NRG Energy. NRG Energy is trading at a lower price-to-earnings ratio than TXNM Energy, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

NRG Energy has a beta of 1.12, indicating that its stock price is 12% more volatile than the S&P 500. Comparatively, TXNM Energy has a beta of 0.4, indicating that its stock price is 60% less volatile than the S&P 500.

Insider and Institutional Ownership

97.7% of NRG Energy shares are owned by institutional investors. Comparatively, 91.7% of TXNM Energy shares are owned by institutional investors. 0.9% of NRG Energy shares are owned by insiders. Comparatively, 1.4% of TXNM Energy shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares NRG Energy and TXNM Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NRG Energy	3.43%	48.96%	4.73%
TXNM Energy	9.26%	9.69%	2.26%

Summary

NRG Energy beats TXNM Energy on 9 of the 16 factors compared between the two stocks.

About NRG Energy

NRG Energy, Inc., together with its subsidiaries, operates as an energy and home services company in the United States and Canada. It operates through Texas; East; West/Services/Other; Vivint Smart Home; and Corporate Activities segments. The company produces and sells electricity generated using coal, oil, solar, and battery storage; natural gas; and a cloud-based home platform, including hardware, software, sales, installation, customer service, technical support, and professional monitoring solutions. It offers retail electricity and energy management, line and surge protection products, HVAC installation, repair and maintenance, home protection products, carbon offsets, back-up power stations, portable power, portable solar, and portable lighting; retail services comprising demand response, commodity sales, energy efficiency, and energy management solutions; and system power, distributed generation, renewable and low-carbon products, carbon management and specialty services, backup generation, storage and distributed solar, and energy advisory services. In addition, the company trades in power, natural gas, and related commodities; environmental products; weather products; and financial products, including forwards, futures, options, and swaps. It offers its products and services under the NRG, Reliant, Direct Energy, Green Mountain Energy, and Vivint. It serves residential, commercial, government, industrial, and wholesale customers. NRG Energy, Inc. was founded in 1989 and is headquartered in Houston, Texas.

About TXNM Energy

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.