Reviewing PNM Resources, Inc. (Holding Co.) (PNM) & IDACORP (IDA)

PNM Resources, Inc. (Holding Co.) (NYSE: PNM) and IDACORP (NYSE:IDA) are both mid-cap utilities companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, earnings, institutional ownership, dividends, valuation and risk.

Profitability

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

Net Margins Return on Equity Return on Assets
PNM Resources, Inc. (Holding Co.) 10.05% 8.57% 2.33%
IDACORP 15.31% 9.20% 3.20%

Analyst Recommendations

This is a summary of recent recommendations for PNM Resources, Inc. (Holding Co.) and IDACORP, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
PNM Resources, Inc. (Holding Co.) 1 8 1 0 2.00
IDACORP 0 2 0 0 2.00

PNM Resources, Inc. (Holding Co.) currently has a consensus target price of $37.74, suggesting a potential downside of 10.68%. IDACORP has a consensus target price of $75.00, suggesting a potential downside of 16.64%. Given PNM Resources, Inc. (Holding Co.)’s higher probable upside, equities research analysts clearly believe PNM Resources, Inc. (Holding Co.) is more favorable than IDACORP.

Insider & Institutional Ownership

95.2% of PNM Resources, Inc. (Holding Co.) shares are owned by institutional investors. Comparatively, 76.0% of IDACORP shares are owned by institutional investors. 1.3% of PNM Resources, Inc. (Holding Co.) shares are owned by company insiders. Comparatively, 0.7% of IDACORP shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Risk & Volatility

PNM Resources, Inc. (Holding Co.) has a beta of 0.32, suggesting that its share price is 68% less volatile than the S&P 500. Comparatively, IDACORP has a beta of 0.51, suggesting that its share price is 49% less volatile than the S&P 500.

Earnings & Valuation

This table compares PNM Resources, Inc. (Holding Co.) and IDACORP’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
PNM Resources, Inc. (Holding Co.) $1.43 billion 2.35 $569.83 million $1.75 24.14
IDACORP $1.30 billion 3.49 $438.95 million $3.96 22.72

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

Dividends

PNM Resources, Inc. (Holding Co.) pays an annual dividend of $0.97 per share and has a dividend yield of 2.3%. IDACORP pays an annual dividend of $2.20 per share and has a dividend yield of 2.4%. PNM Resources, Inc. (Holding Co.) pays out 55.4% of its earnings in the form of a dividend. IDACORP pays out 55.6% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. PNM Resources, Inc. (Holding Co.) has increased its dividend for 5 consecutive years and IDACORP has increased its dividend for 5 consecutive years.

Summary

PNM Resources, Inc. (Holding Co.) beats IDACORP on 8 of the 15 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 IDACORP

IDACORP, Inc. is a holding company. The Company’s principal operating subsidiary is Idaho Power Company (Idaho Power). The Company’s segment is utility operations. The utility operations segment’s primary source of revenue is the regulated operations of Idaho Power. Idaho Power is an electric utility engaged in the generation, transmission, distribution, sale and purchase of electric energy and capacity. Idaho Power is the parent of Idaho Energy Resources Co. (IERCo), a joint venturer in Bridger Coal Company, which mines and supplies coal to the Jim Bridger generating plant owned in part by Idaho Power. Its subsidiaries also include IDACORP Financial Services, Inc., an investor in affordable housing and other real estate investments, and Ida-West Energy Company, an operator of small hydroelectric generation projects. As of December 31, 2016, Idaho Power provided electric utility service to approximately 535,000 general business customers in southern Idaho and eastern Oregon.

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