PNM Resources, Inc. (Holding Co.) (NYSE: PNM) and Public Service Enterprise Group (NYSE:PEG) are both mid-cap utilities companies, but which is the better investment? We will compare the two companies based on the strength of their analyst recommendations, valuation, profitabiliy, dividends, earnings, institutional ownership and risk.

Risk and Volatility

PNM Resources, Inc. (Holding Co.) has a beta of 0.33, suggesting that its stock price is 67% less volatile than the S&P 500. Comparatively, Public Service Enterprise Group has a beta of 0.39, suggesting that its stock price is 61% less volatile than the S&P 500.

Profitability

This table compares PNM Resources, Inc. (Holding Co.) and Public Service Enterprise Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
PNM Resources, Inc. (Holding Co.) 9.62% 8.22% 2.24%
Public Service Enterprise Group 5.86% 11.17% 3.74%

Institutional & Insider Ownership

94.5% of PNM Resources, Inc. (Holding Co.) shares are owned by institutional investors. Comparatively, 66.5% of Public Service Enterprise Group shares are owned by institutional investors. 1.3% of PNM Resources, Inc. (Holding Co.) shares are owned by insiders. Comparatively, 0.6% of Public Service Enterprise Group shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Dividends

PNM Resources, Inc. (Holding Co.) pays an annual dividend of $0.97 per share and has a dividend yield of 2.4%. Public Service Enterprise Group pays an annual dividend of $1.72 per share and has a dividend yield of 3.9%. PNM Resources, Inc. (Holding Co.) pays out 59.9% of its earnings in the form of a dividend. Public Service Enterprise Group pays out 165.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. PNM Resources, Inc. (Holding Co.) has increased its dividend for 5 consecutive years and Public Service Enterprise Group has increased its dividend for 5 consecutive years.

Analyst Recommendations

This is a breakdown of current ratings for PNM Resources, Inc. (Holding Co.) and Public Service Enterprise Group, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
PNM Resources, Inc. (Holding Co.) 1 5 2 0 2.13
Public Service Enterprise Group 0 5 5 0 2.50

PNM Resources, Inc. (Holding Co.) presently has a consensus target price of $36.09, indicating a potential downside of 9.43%. Public Service Enterprise Group has a consensus target price of $46.67, indicating a potential upside of 4.99%. Given Public Service Enterprise Group’s stronger consensus rating and higher probable upside, analysts plainly believe Public Service Enterprise Group is more favorable than PNM Resources, Inc. (Holding Co.).

Earnings and Valuation

This table compares PNM Resources, Inc. (Holding Co.) and Public Service Enterprise Group’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
PNM Resources, Inc. (Holding Co.) $1.38 billion 2.30 $541.80 million $1.62 24.60
Public Service Enterprise Group $9.04 billion 2.49 $3.33 billion $1.04 42.74

Public Service Enterprise Group has higher revenue and earnings than PNM Resources, Inc. (Holding Co.). PNM Resources, Inc. (Holding Co.) is trading at a lower price-to-earnings ratio than Public Service Enterprise Group, indicating that it is currently the more affordable of the two stocks.

Summary

Public Service Enterprise Group beats PNM Resources, Inc. (Holding Co.) on 10 of the 16 factors compared between the two stocks.

About PNM Resources, Inc. (Holding Co.)

PNM Resources, Inc. (PNMR) is an investor-owned holding company with approximately two regulated utilities providing electricity and electric services in New Mexico and Texas. PNMR’s electric utilities are Public Service Company of New Mexico (PNM) and Texas-New Mexico Power Company (TNMP). It operates in three segments: PNM, TNMP, and Corporate and Other. The Company, through its Website provides information, including news releases, notices of Webcasts, and filings. PNM is an electric utility that provides electric generation, transmission and distribution service to its rate-regulated customers. TNMP is a regulated utility operating in Texas. TNMP provides transmission and distribution services in Texas under the provisions of Texas Electric Choice Act (TECA) and the Texas Public Utility Regulatory Act. The Corporate and Other segment includes PNMR holding company activities, related to corporate level debt and PNMR Services Company.

About Public Service Enterprise Group

Public Service Enterprise Group Incorporated (PSEG) is a holding company. The Company is an energy company with operations located primarily in the Northeastern and Mid-Atlantic United States. The Company’s segments include Public Service Electric and Gas Company (PSE&G), PSEG Power LLC (Power) and Other. PSEG is engaged in the transmission of electricity and distribution of electricity and natural gas in certain areas of New Jersey. PSE&G is also the provider of last resort for gas and electric commodity service for end users in its service territory. Power is a multi-regional energy supply company that integrates the operations of its merchant nuclear and fossil generating assets with its power marketing businesses through energy sales in energy markets and fuel supply functions primarily in the Northeast and Mid-Atlantic United States through its principal subsidiaries. In addition, Power owns and operates solar generation in various states.

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