PNM RESOURCES INC (PNM) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:PNM - US69349H1077 - Common Stock
41.77 USD
-0.44 (-1.04%)
41.77 USD
0 (0%)
Taking everything into account, PNM scores 2 out of 10 in our fundamental rating. PNM was compared to 46 industry peers in the Electric Utilities industry. PNM has a bad profitability rating. Also its financial health evaluation is rather negative. PNM does not seem to be growing, but still is valued expensively.
1. Profitability
1.1 Basic Checks
- In the past year PNM was profitable.
- PNM had a positive operating cash flow in the past year.
- PNM had positive earnings in each of the past 5 years.
- Each year in the past 5 years PNM had a positive operating cash flow.
1.2 Ratios
- With a Return On Assets value of 0.78%, PNM is not doing good in the industry: 93.33% of the companies in the same industry are doing better.
- PNM has a Return On Equity of 3.38%. This is amonst the worse of the industry: PNM underperforms 93.33% of its industry peers.
- PNM has a Return On Invested Capital of 2.70%. This is in the lower half of the industry: PNM underperforms 77.78% of its industry peers.
- PNM had an Average Return On Invested Capital over the past 3 years of 3.42%. This is in line with the industry average of 4.58%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.78% | ||
| ROE | 3.38% | ||
| ROIC | 2.7% |
ROA(3y)1.65%
ROA(5y)1.64%
ROE(3y)6.8%
ROE(5y)6.67%
ROIC(3y)3.42%
ROIC(5y)3.56%
1.3 Margins
- PNM has a Profit Margin of 4.37%. This is amonst the worse of the industry: PNM underperforms 86.67% of its industry peers.
- PNM's Profit Margin has declined in the last couple of years.
- PNM has a Operating Margin of 15.79%. This is in the lower half of the industry: PNM underperforms 66.67% of its industry peers.
- PNM's Operating Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 15.79% | ||
| PM (TTM) | 4.37% | ||
| GM | N/A |
OM growth 3Y-5.96%
OM growth 5Y-5.73%
PM growth 3Y-26.37%
PM growth 5Y-5.34%
GM growth 3YN/A
GM growth 5YN/A
2. Health
2.1 Basic Checks
- The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so PNM is destroying value.
- Compared to 1 year ago, PNM has more shares outstanding
- PNM has a worse debt/assets ratio than last year.
2.2 Solvency
- Based on the Altman-Z score of 0.59, we must say that PNM is in the distress zone and has some risk of bankruptcy.
- PNM has a Altman-Z score of 0.59. This is in the lower half of the industry: PNM underperforms 77.78% of its industry peers.
- A Debt/Equity ratio of 1.95 is on the high side and indicates that PNM has dependencies on debt financing.
- PNM has a Debt to Equity ratio of 1.95. This is amonst the worse of the industry: PNM underperforms 88.89% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.95 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 0.59 |
ROIC/WACC0.49
WACC5.53%
2.3 Liquidity
- A Current Ratio of 0.37 indicates that PNM may have some problems paying its short term obligations.
- With a Current ratio value of 0.37, PNM is not doing good in the industry: 95.56% of the companies in the same industry are doing better.
- PNM has a Quick Ratio of 0.37. This is a bad value and indicates that PNM is not financially healthy enough and could expect problems in meeting its short term obligations.
- Looking at the Quick ratio, with a value of 0.27, PNM is doing worse than 93.33% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.37 | ||
| Quick Ratio | 0.27 |
3. Growth
3.1 Past
- The Earnings Per Share has been growing slightly by 5.22% over the past year.
- Measured over the past 5 years, PNM shows a small growth in Earnings Per Share. The EPS has been growing by 7.11% on average per year.
- PNM shows a very negative growth in Revenue. In the last year, the Revenue has decreased by -13.80%.
- PNM shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 6.18% yearly.
EPS 1Y (TTM)5.22%
EPS 3Y7.34%
EPS 5Y7.11%
EPS Q2Q%0%
Revenue 1Y (TTM)-13.8%
Revenue growth 3Y8.39%
Revenue growth 5Y6.18%
Sales Q2Q%N/A
3.2 Future
- PNM is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 4.62% yearly.
- Based on estimates for the next years, PNM will show a small growth in Revenue. The Revenue will grow by 4.85% on average per year.
EPS Next Y-3.73%
EPS Next 2Y0.39%
EPS Next 3Y2.6%
EPS Next 5Y4.62%
Revenue Next Year0.38%
Revenue Next 2Y3.29%
Revenue Next 3Y4.25%
Revenue Next 5Y4.85%
3.3 Evolution
- The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
- Based on the Price/Earnings ratio of 14.81, the valuation of PNM can be described as correct.
- Based on the Price/Earnings ratio, PNM is valued a bit cheaper than the industry average as 64.44% of the companies are valued more expensively.
- PNM's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 27.30.
- With a Price/Forward Earnings ratio of 14.70, PNM is valued correctly.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of PNM is on the same level as its industry peers.
- PNM's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 24.32.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.81 | ||
| Fwd PE | 14.7 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, PNM is valued a bit more expensive than 68.89% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 12.79 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)2.08
EPS Next 2Y0.39%
EPS Next 3Y2.6%
5. Dividend
5.1 Amount
- PNM has a Yearly Dividend Yield of 3.71%.
- PNM's Dividend Yield is comparable with the industry average which is at 2.93.
- Compared to an average S&P500 Dividend Yield of 1.82, PNM pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.71% |
5.2 History
- On average, the dividend of PNM grows each year by 6.18%, which is quite nice.
- PNM has paid a dividend for at least 10 years, which is a reliable track record.
- PNM has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)6.18%
Div Incr Years12
Div Non Decr Years14
5.3 Sustainability
- 162.66% of the earnings are spent on dividend by PNM. This is not a sustainable payout ratio.
- The dividend of PNM is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP162.66%
EPS Next 2Y0.39%
EPS Next 3Y2.6%
PNM RESOURCES INC / PNM FAQ
Can you provide the ChartMill fundamental rating for PNM RESOURCES INC?
ChartMill assigns a fundamental rating of 2 / 10 to PNM.
Can you provide the valuation status for PNM RESOURCES INC?
ChartMill assigns a valuation rating of 2 / 10 to PNM RESOURCES INC (PNM). This can be considered as Overvalued.
How profitable is PNM RESOURCES INC (PNM) stock?
PNM RESOURCES INC (PNM) has a profitability rating of 2 / 10.
What is the financial health of PNM RESOURCES INC (PNM) stock?
The financial health rating of PNM RESOURCES INC (PNM) is 0 / 10.
Can you provide the expected EPS growth for PNM stock?
The Earnings per Share (EPS) of PNM RESOURCES INC (PNM) is expected to decline by -3.73% in the next year.