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Reasons to Add PNM Resources (PNM) to Portfolio Right Now
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PNM Resources Inc. (PNM - Free Report) through the phased exit from coal-based generation assets and initiatives to provide reliable and affordable clean energy to customers will drive its performance in the long run.
Let’s focus on the factors that make this Zacks Rank #2 (Buy) stock a strong investment pick at the moment.
Growth Projection
The Zacks Consensus Estimate for PNM Resources’ 2022 earnings has moved up by 1.6% in the past 60 days to $2.55 per share. PNM’s 2022 earnings suggest year-over-year growth of 6.7%.
PNM Resources’ long-term (three to five years) earnings growth is projected at 5%.
Dividend
PNM Resources has a long history of dividend payments and has paid dividends to shareholders consecutively since 1996. PNM Resources’ current dividend payout target is in the range of 50-60%. It has raised dividends annually for 25 consecutive years. The new dividend for 2022 is $1.39 per share, which represents a 6.1% increase from 2021. This is consistent with the target payout ratio of 55% of the net income.
Currently, PNM has a dividend yield of 3% compared with the Zacks S&P 500 composite's average of 1.46%.
Stable Investment &Emissions Reduction
In the 2022-2025 period, PNM Resources plans to invest $3.5 billion to further strengthen its transmission and distribution infrastructure and improve the reliability of its operations. The capital expenditure plan includes $0.5 billion to support the economic expansion and clean energy transition.
PNM Resources has long-standing expertise in fulfilling environmental regulations. PNM Resources is focused on exiting coal-fired generation by 2024, replacing the production with renewables, and targets to have an emissions-free generating portfolio by 2040 to bring cleaner energy sources to the production portfolio.
Return on Equity
Return on Equity (ROE) indicates how efficiently a company is utilizing shareholders’ funds in the business to generate returns. At present, PNM’s ROE is 9.7%, higher than the industry average of 9.2%, which indicates that the company is utilizing the funds more effectively than industry peers.
Price Performance
In the past three months, PNM Resources has rallied 1% compared with the industry’s 1.5% growth.
The long-term earnings growth of Atmos Energy, Xcel Energy and WEC Energy is projected at 7.3%, 6.4% and 6%, respectively.
The Zacks Consensus Estimate for 2022 earnings per share of Atmos Energy, Xcel Energy and WEC Energy has moved up 7.6%, 7.4% and 4.6%, respectively, year over year.
In the past three months, ATO, XEL and WEC’s shares have surged 18.4%, 5.6% and 0.6%, respectively.
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Reasons to Add PNM Resources (PNM) to Portfolio Right Now
PNM Resources Inc. (PNM - Free Report) through the phased exit from coal-based generation assets and initiatives to provide reliable and affordable clean energy to customers will drive its performance in the long run.
Let’s focus on the factors that make this Zacks Rank #2 (Buy) stock a strong investment pick at the moment.
Growth Projection
The Zacks Consensus Estimate for PNM Resources’ 2022 earnings has moved up by 1.6% in the past 60 days to $2.55 per share. PNM’s 2022 earnings suggest year-over-year growth of 6.7%.
PNM Resources’ long-term (three to five years) earnings growth is projected at 5%.
Dividend
PNM Resources has a long history of dividend payments and has paid dividends to shareholders consecutively since 1996. PNM Resources’ current dividend payout target is in the range of 50-60%. It has raised dividends annually for 25 consecutive years. The new dividend for 2022 is $1.39 per share, which represents a 6.1% increase from 2021. This is consistent with the target payout ratio of 55% of the net income.
Currently, PNM has a dividend yield of 3% compared with the Zacks S&P 500 composite's average of 1.46%.
Stable Investment &Emissions Reduction
In the 2022-2025 period, PNM Resources plans to invest $3.5 billion to further strengthen its transmission and distribution infrastructure and improve the reliability of its operations. The capital expenditure plan includes $0.5 billion to support the economic expansion and clean energy transition.
PNM Resources has long-standing expertise in fulfilling environmental regulations. PNM Resources is focused on exiting coal-fired generation by 2024, replacing the production with renewables, and targets to have an emissions-free generating portfolio by 2040 to bring cleaner energy sources to the production portfolio.
Return on Equity
Return on Equity (ROE) indicates how efficiently a company is utilizing shareholders’ funds in the business to generate returns. At present, PNM’s ROE is 9.7%, higher than the industry average of 9.2%, which indicates that the company is utilizing the funds more effectively than industry peers.
Price Performance
In the past three months, PNM Resources has rallied 1% compared with the industry’s 1.5% growth.
Image Source: Zacks Investment Research
Other Stocks to Consider
Other similar-ranked stocks from the same industry include Atmos Energy Corp. (ATO - Free Report) , Xcel Energy Inc. (XEL - Free Report) and WEC Energy Group Inc. (WEC - Free Report) .You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The long-term earnings growth of Atmos Energy, Xcel Energy and WEC Energy is projected at 7.3%, 6.4% and 6%, respectively.
The Zacks Consensus Estimate for 2022 earnings per share of Atmos Energy, Xcel Energy and WEC Energy has moved up 7.6%, 7.4% and 4.6%, respectively, year over year.
In the past three months, ATO, XEL and WEC’s shares have surged 18.4%, 5.6% and 0.6%, respectively.