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PNM RESOURCES INC (PNM) Stock Fundamental Analysis

NYSE:PNM - New York Stock Exchange, Inc. - US69349H1077 - Common Stock - Currency: USD

41.77  -0.44 (-1.04%)

After market: 41.77 0 (0%)

Fundamental Rating

2

Overall PNM gets a fundamental rating of 2 out of 10. We evaluated PNM against 47 industry peers in the Electric Utilities industry. PNM may be in some trouble as it scores bad on both profitability and health. PNM does not seem to be growing, but still is valued expensively.


Dividend Valuation Growth Profitability Health

2

1. Profitability

1.1 Basic Checks

In the past year PNM was profitable.
In the past year PNM had a positive cash flow from operations.
PNM had positive earnings in each of the past 5 years.
In the past 5 years PNM always reported a positive cash flow from operatings.
PNM Yearly Net Income VS EBIT VS OCF VS FCFPNM Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 200M -200M 400M -400M

1.2 Ratios

PNM has a Return On Assets of 0.78%. This is amonst the worse of the industry: PNM underperforms 93.33% of its industry peers.
Looking at the Return On Equity, with a value of 3.38%, PNM is doing worse than 93.33% of the companies in the same industry.
PNM has a worse Return On Invested Capital (2.70%) than 77.78% of its industry peers.
The Average Return On Invested Capital over the past 3 years for PNM is significantly below the industry average of 38.54%.
Industry RankSector 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%
PNM Yearly ROA, ROE, ROICPNM Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 2 4 6 8

1.3 Margins

Looking at the Profit Margin, with a value of 4.37%, PNM is doing worse than 86.67% of the companies in the same industry.
PNM's Profit Margin has declined in the last couple of years.
With a Operating Margin value of 15.79%, PNM is not doing good in the industry: 66.67% of the companies in the same industry are doing better.
PNM's Operating Margin has declined in the last couple of years.
Industry RankSector 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
PNM Yearly Profit, Operating, Gross MarginsPNM Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 5 10 15 20

0

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
The number of shares outstanding for PNM has been increased compared to 5 years ago.
The debt/assets ratio for PNM is higher compared to a year ago.
PNM Yearly Shares OutstandingPNM Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 20M 40M 60M 80M
PNM Yearly Total Debt VS Total AssetsPNM Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 2B 4B 6B 8B 10B

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's Debt to Equity ratio of 1.95 is on the low side compared to the rest of the industry. PNM is outperformed by 88.89% of its industry peers.
Industry RankSector Rank
Debt/Equity 1.95
Debt/FCF N/A
Altman-Z 0.59
ROIC/WACC0.49
WACC5.53%
PNM Yearly LT Debt VS Equity VS FCFPNM Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 1B 2B 3B 4B

2.3 Liquidity

PNM has a Current 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.
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.
PNM's Quick ratio of 0.27 is on the low side compared to the rest of the industry. PNM is outperformed by 93.33% of its industry peers.
Industry RankSector Rank
Current Ratio 0.37
Quick Ratio 0.27
PNM Yearly Current Assets VS Current LiabilitesPNM Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 200M 400M 600M 800M 1B

3

3. Growth

3.1 Past

The Earnings Per Share has been growing slightly by 5.22% over the past year.
The Earnings Per Share has been growing slightly by 7.11% on average over the past years.
PNM shows a very negative growth in Revenue. In the last year, the Revenue has decreased by -13.80%.
The Revenue has been growing slightly by 6.18% on average over the past years.
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

Based on estimates for the next years, PNM will show a small growth in Earnings Per Share. The EPS will grow by 4.62% on average per year.
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

When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
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.
PNM Yearly Revenue VS EstimatesPNM Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 500M 1B 1.5B 2B 2.5B
PNM Yearly EPS VS EstimatesPNM Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 1 2 3

3

4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings ratio is 14.81, which indicates a correct valuation of PNM.
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 27.50.
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 rather cheap valuation when compared to the S&P500 average which is at 36.44.
Industry RankSector Rank
PE 14.81
Fwd PE 14.7
PNM Price Earnings VS Forward Price EarningsPNM Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 10 20 30

4.2 Price Multiples

Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of PNM indicates a slightly more expensive valuation: PNM is more expensive than 68.89% of the companies listed in the same industry.
Industry RankSector Rank
P/FCF N/A
EV/EBITDA 12.79
PNM Per share dataPNM EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 10 20

4.3 Compensation for Growth

PEG (NY)N/A
PEG (5Y)2.08
EPS Next 2Y0.39%
EPS Next 3Y2.6%

5

5. Dividend

5.1 Amount

PNM has a Yearly Dividend Yield of 3.71%. Purely for dividend investing, there may be better candidates out there.
PNM's Dividend Yield is comparable with the industry average which is at 3.64.
PNM's Dividend Yield is rather good when compared to the S&P500 average which is at 2.35.
Industry RankSector Rank
Dividend Yield 3.71%

5.2 History

The dividend of PNM is nicely growing with an annual growth rate of 6.18%!
PNM has been paying a dividend for at least 10 years, so it has 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
PNM Yearly Dividends per sharePNM Yearly Dividends per shareYearly Dividends per share 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0.5 1

5.3 Sustainability

PNM pays out 162.66% of its income as dividend. 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 Yearly Income VS Free CF VS DividendPNM Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 -200M -400M
PNM Dividend Payout.PNM Dividend Payout, showing the Payout Ratio.PNM Dividend Payout.PayoutRetained Earnings

PNM RESOURCES INC

NYSE:PNM (8/2/2024, 8:26:38 PM)

After market: 41.77 0 (0%)

41.77

-0.44 (-1.04%)

Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryElectric Utilities
Earnings (Last)07-31 2024-07-31/bmo
Earnings (Next)10-25 2024-10-25/bmo
Inst Owners95.18%
Inst Owner Change0%
Ins Owners0.68%
Ins Owner Change0%
Market Cap3.77B
Analysts76.67
Price Target45.61 (9.19%)
Short Float %N/A
Short RatioN/A
Dividend
Industry RankSector Rank
Dividend Yield 3.71%
Yearly Dividend1.44
Dividend Growth(5Y)6.18%
DP162.66%
Div Incr Years12
Div Non Decr Years14
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)11.9%
Min EPS beat(2)2.36%
Max EPS beat(2)21.44%
EPS beat(4)3
Avg EPS beat(4)7.91%
Min EPS beat(4)-2.8%
Max EPS beat(4)21.44%
EPS beat(8)6
Avg EPS beat(8)7.92%
EPS beat(12)10
Avg EPS beat(12)24.06%
EPS beat(16)13
Avg EPS beat(16)22.18%
Revenue beat(2)0
Avg Revenue beat(2)-21.59%
Min Revenue beat(2)-24.65%
Max Revenue beat(2)-18.54%
Revenue beat(4)1
Avg Revenue beat(4)-15.15%
Min Revenue beat(4)-24.65%
Max Revenue beat(4)5.75%
Revenue beat(8)5
Avg Revenue beat(8)16.69%
Revenue beat(12)8
Avg Revenue beat(12)15.79%
Revenue beat(16)10
Avg Revenue beat(16)11.41%
PT rev (1m)0.58%
PT rev (3m)-0.7%
EPS NQ rev (1m)4.06%
EPS NQ rev (3m)5.9%
EPS NY rev (1m)0.08%
EPS NY rev (3m)0.68%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.08%
Revenue NY rev (1m)0.95%
Revenue NY rev (3m)-6.83%
Valuation
Industry RankSector Rank
PE 14.81
Fwd PE 14.7
P/S 2.06
P/FCF N/A
P/OCF 7.35
P/B 1.59
P/tB 1.8
EV/EBITDA 12.79
EPS(TTM)2.82
EY6.75%
EPS(NY)2.84
Fwd EY6.8%
FCF(TTM)-6.52
FCFYN/A
OCF(TTM)5.68
OCFY13.6%
SpS20.31
BVpS26.24
TBVpS23.16
PEG (NY)N/A
PEG (5Y)2.08
Profitability
Industry RankSector Rank
ROA 0.78%
ROE 3.38%
ROCE 3.16%
ROIC 2.7%
ROICexc 2.7%
ROICexgc 2.78%
OM 15.79%
PM (TTM) 4.37%
GM N/A
FCFM N/A
ROA(3y)1.65%
ROA(5y)1.64%
ROE(3y)6.8%
ROE(5y)6.67%
ROIC(3y)3.42%
ROIC(5y)3.56%
ROICexc(3y)3.42%
ROICexc(5y)3.57%
ROICexgc(3y)3.53%
ROICexgc(5y)3.7%
ROCE(3y)3.98%
ROCE(5y)4.14%
ROICexcg growth 3Y-7.78%
ROICexcg growth 5Y-6.77%
ROICexc growth 3Y-7.46%
ROICexc growth 5Y-6.53%
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
F-Score4
Asset Turnover0.18
Health
Industry RankSector Rank
Debt/Equity 1.95
Debt/FCF N/A
Debt/EBITDA 7.01
Cap/Depr 297.79%
Cap/Sales 60.07%
Interest Coverage 1.76
Cash Conversion 77.79%
Profit Quality N/A
Current Ratio 0.37
Quick Ratio 0.27
Altman-Z 0.59
F-Score4
WACC5.53%
ROIC/WACC0.49
Cap/Depr(3y)287.89%
Cap/Depr(5y)256.83%
Cap/Sales(3y)49.53%
Cap/Sales(5y)47.09%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)5.22%
EPS 3Y7.34%
EPS 5Y7.11%
EPS Q2Q%0%
EPS Next Y-3.73%
EPS Next 2Y0.39%
EPS Next 3Y2.6%
EPS Next 5Y4.62%
Revenue 1Y (TTM)-13.8%
Revenue growth 3Y8.39%
Revenue growth 5Y6.18%
Sales Q2Q%N/A
Revenue Next Year0.38%
Revenue Next 2Y3.29%
Revenue Next 3Y4.25%
Revenue Next 5Y4.85%
EBIT growth 1Y-32.05%
EBIT growth 3Y1.93%
EBIT growth 5Y0.1%
EBIT Next Year77.87%
EBIT Next 3Y29.73%
EBIT Next 5Y22.24%
FCF growth 1Y-48.98%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-11.33%
OCF growth 3Y4.31%
OCF growth 5Y5.18%