Entergy (NYSE: ETR) and PNM Resources (NYSE:PNM) are both utilities companies, but which is the superior business? We will contrast the two companies based on the strength of their profitability, valuation, earnings, analyst recommendations, risk, institutional ownership and dividends.
Valuation & Earnings
This table compares Entergy and PNM Resources’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Entergy||$11.07 billion||1.33||$425.35 million||$7.20||11.35|
|PNM Resources||$1.45 billion||2.15||$80.40 million||$1.94||20.08|
Entergy has higher revenue and earnings than PNM Resources. Entergy is trading at a lower price-to-earnings ratio than PNM Resources, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
Entergy has a beta of 0.46, indicating that its share price is 54% less volatile than the S&P 500. Comparatively, PNM Resources has a beta of 0.27, indicating that its share price is 73% less volatile than the S&P 500.
This is a breakdown of recent recommendations and price targets for Entergy and PNM Resources, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Entergy currently has a consensus target price of $84.95, indicating a potential upside of 3.93%. PNM Resources has a consensus target price of $38.81, indicating a potential downside of 0.36%. Given Entergy’s stronger consensus rating and higher probable upside, research analysts clearly believe Entergy is more favorable than PNM Resources.
Institutional and Insider Ownership
85.7% of Entergy shares are owned by institutional investors. Comparatively, 90.6% of PNM Resources shares are owned by institutional investors. 0.3% of Entergy shares are owned by company insiders. Comparatively, 1.3% of PNM Resources shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
This table compares Entergy and PNM Resources’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Entergy pays an annual dividend of $3.56 per share and has a dividend yield of 4.4%. PNM Resources pays an annual dividend of $1.06 per share and has a dividend yield of 2.7%. Entergy pays out 49.4% of its earnings in the form of a dividend. PNM Resources pays out 54.6% 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. Entergy has increased its dividend for 3 consecutive years and PNM Resources has increased its dividend for 6 consecutive years. Entergy is clearly the better dividend stock, given its higher yield and lower payout ratio.
Entergy beats PNM Resources on 11 of the 17 factors compared between the two stocks.
Entergy Company Profile
Entergy Corporation, together with its subsidiaries, engages in the production and distribution of electricity in the United States. It generates electricity through gas/oil, nuclear, coal, hydro, and solar power sources. The company's Utility segment generates, transmits, distributes, and sells electric power in portions of Arkansas, Mississippi, Texas, and Louisiana, including the City of New Orleans; and distributes natural gas. Its Entergy Wholesale Commodities segment engages in the ownership, operation, and decommissioning of nuclear power plants located in the northern United States; sale of electric power to wholesale customers; provision of services to other nuclear power plant owners; and owning interests in non-nuclear power plants that sell electric power to wholesale customers. This segment sells energy to retail power providers, utilities, electric power co-operatives, power trading organizations, and other power generation companies. The company's power plants have approximately 30,000 megawatts (MW) of electric generating capacity, including approximately 9,000 MW of nuclear power. The company delivers electricity to 2.9 million utility customers in Arkansas, Louisiana, Mississippi, and Texas. Entergy Corporation was founded in 1949 and is based in New Orleans, Louisiana.
PNM Resources Company Profile
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, 2017, this segment had owned or leased facilities with a total net generation capacity of 2,102 megawatts; and owned 3,200 miles of electric transmission lines, 6,063 miles of distribution overhead lines, 5,828 miles of underground distribution lines, and 254 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, 2017, this segment owned 978 miles of overhead electric transmission lines, 7,111 miles of overhead distribution lines, 1,241 miles of underground distribution lines, and 116 substations. It also owns and leases vehicles, service facilities, and office locations throughout its service territory. The company serves approximately 773,000 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.
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