PNM Resources (NYSE:PNM) and Datang Intl Power Generation (OTCMKTS:DIPGY) are both mid-cap utilities companies, but which is the superior investment? We will contrast the two companies based on the strength of their earnings, dividends, valuation, profitability, risk, analyst recommendations and institutional ownership.
This table compares PNM Resources and Datang Intl Power Generation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Datang Intl Power Generation||1.03%||1.47%||0.35%|
89.3% of PNM Resources shares are held by institutional investors. 1.2% of PNM Resources shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
PNM Resources pays an annual dividend of $1.16 per share and has a dividend yield of 2.3%. Datang Intl Power Generation pays an annual dividend of $0.24 per share and has a dividend yield of 5.1%. PNM Resources pays out 58.0% of its earnings in the form of a dividend. Datang Intl Power Generation pays out 109.1% 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 has increased its dividend for 7 consecutive years.
Earnings and Valuation
This table compares PNM Resources and Datang Intl Power Generation’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|PNM Resources||$1.44 billion||2.83||$86.17 million||$2.00||25.50|
|Datang Intl Power Generation||$14.11 billion||0.31||$186.19 million||$0.22||21.27|
Datang Intl Power Generation has higher revenue and earnings than PNM Resources. Datang Intl Power Generation is trading at a lower price-to-earnings ratio than PNM Resources, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of recent ratings and price targets for PNM Resources and Datang Intl Power Generation, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Datang Intl Power Generation||0||0||0||0||N/A|
PNM Resources currently has a consensus price target of $50.43, suggesting a potential downside of 1.12%. Given PNM Resources’ higher probable upside, equities research analysts clearly believe PNM Resources is more favorable than Datang Intl Power Generation.
Volatility and Risk
PNM Resources has a beta of 0.24, indicating that its stock price is 76% less volatile than the S&P 500. Comparatively, Datang Intl Power Generation has a beta of 0.55, indicating that its stock price is 45% less volatile than the S&P 500.
PNM Resources beats Datang Intl Power Generation on 11 of the 16 factors compared between the two stocks.
About PNM Resources
PNM Resources, Inc., through its subsidiaries, engages in the energy and energy-related businesses 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 is primarily involved in the generation, transmission, and distribution of electricity. It generates electricity using coal, natural gas and oil, nuclear fuel, solar, wind, and geothermal energy sources. As of December 31, 2018, this segment had owned or leased facilities with a total net generation capacity of 2,102 megawatts; and owned 3,206 miles of electric transmission lines, 6,067 miles of distribution overhead lines, 5,885 miles of underground distribution lines, and 255 substations. It also owns and leases office and other equipment, office space, vehicles, and real estate. The TNMP segment provides regulated transmission and distribution services. As of December 31, 2018, this segment owned 997 miles of overhead electric transmission lines, 7,151 miles of overhead distribution lines, 1,260 miles of underground distribution lines, and 122 substations. It also owns and leases vehicles, service facilities, and office locations throughout its service territory. The company serves approximately 782,000 residential, commercial, and industrial customers, as well as end-users of electricity in New Mexico and Texas. PNM Resources, Inc. was founded in 1917 and is headquartered in Albuquerque, New Mexico.
About Datang Intl Power Generation
Datang International Power Generation Co., Ltd., together with its subsidiaries, engages in power generation, and power plant development in the People's Republic of China. It operates through Power Generation, Coal, and Other segments. The company generates electricity through various sources, such as coal-fired, thermal, hydro, wind, nuclear, solar, and natural gas. As of December 31, 2017, it managed an installed capacity of approximately 48,031.175 MW. The company also engages in heat supply; the import of power related fuel; coal mining and trading; silicon and aluminium smelting; the production and sale of alumina; cargo shipping; the sale of coal ash and integrated application of solid wastes; the repair and testing of power equipment; and the provision of power related technical services. The company was formerly known as Beijing Datang Power Generation Co., Ltd. The company was founded in 1994 and is headquartered in Beijing, the People's Republic of China. Datang International Power Generation Co., Ltd. is a subsidiary of China Datang Corporation Limited.
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