Cleco Corporate (NYSE: CNL) and PNM Resources (NYSE:PNM) are both mid-cap utilities companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, earnings, risk, profitability, valuation, analyst recommendations and dividends.
Valuation & Earnings
This table compares Cleco Corporate and PNM Resources’ revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|PNM Resources||$1.36 billion||2.09||$117.37 million||$1.98||18.06|
PNM Resources has higher revenue and earnings than Cleco Corporate. PNM Resources is trading at a lower price-to-earnings ratio than Cleco Corporate, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
92.4% of PNM Resources shares are owned by institutional investors. 1.3% of PNM Resources shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
This table compares Cleco Corporate and PNM Resources’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Cleco Corporate pays an annual dividend of $1.60 per share and has a dividend yield of 2.9%. PNM Resources pays an annual dividend of $1.06 per share and has a dividend yield of 3.0%. Cleco Corporate pays out 72.7% of its earnings in the form of a dividend. PNM Resources pays out 53.5% 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. Cleco Corporate has raised its dividend for 6 consecutive years and PNM Resources has raised its dividend for 8 consecutive years. PNM Resources is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Risk & Volatility
Cleco Corporate has a beta of 0.53, indicating that its stock price is 47% less volatile than the S&P 500. Comparatively, PNM Resources has a beta of 0.26, indicating that its stock price is 74% less volatile than the S&P 500.
This is a breakdown of recent ratings for Cleco Corporate and PNM Resources, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
PNM Resources has a consensus price target of $38.90, indicating a potential upside of 8.81%. Given PNM Resources’ higher possible upside, analysts plainly believe PNM Resources is more favorable than Cleco Corporate.
PNM Resources beats Cleco Corporate on 11 of the 14 factors compared between the two stocks.
Cleco Corporate Company Profile
Cleco Corporate Holdings LLC, formerly Cleco Corporation, is a public utility holding company. The Company’s segments include Cleco Power and Other. Cleco Power is a regulated electric utility company that owns over 10 generating units with a total nameplate capacity of approximately 3,330 megawatts (MW) and serves approximately 287,000 customers in Louisiana through its retail business and supplies wholesale power in Louisiana and Mississippi. The Company, through its subsidiaries, owns one transmission substation in Louisiana and one transmission substation in Mississippi. Cleco Power is engaged in the generation, transmission, distribution and sale of electricity within Louisiana. It owns natural gas pipelines and interconnections at all of its generating facilities, which allow it to access various natural gas supply markets and maintain an economical fuel supply for its customers. The Company holds investments in its subsidiary, Cleco Power LLC (Cleco Power).
PNM Resources Company Profile
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.
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