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PNM Resources (PNM) Gains on Investment Amid Regulations
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PNM Resources, Inc.’s (PNM - Free Report) cost-effective power generation and initiatives to provide reliable, clean energy to customers will drive its performance in the long run.
The long-term (three to five years) earnings growth rate is pegged at 4.2%. The Zacks Consensus Estimate for 2022 earnings per share (EPS) suggests 6.1% year-over-year growth. Moreover, PNM’s current dividend yield of 3% is better than the Zacks S&P 500 composite’s average of 1.9%.
Tailwinds
PNM Resources plans to invest $3.5 billion in the 2022-2025 time period 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 economic expansion and clean energy transition.
PNM Resources has longstanding expertise in complying with environmental regulations. The company 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. It aims to become carbon neutral before 2045.
PNM Resources had $320.1 million liquidity as of Jul 29, 2022, which is enough to meet short-term obligations. Its times interest earned ratio (“TIE”) was 2.9 at the end of the second quarter of 2022. A TIE greater than one is indicative of the company’s adequate financial flexibility to meet debt obligations.
Headwinds
PNM Resources signed a merger deal with AVANGRID but there is uncertainty regarding deal completion. The ongoing delay in the completion of the merger can lower the desired returns for the companies.
Significant investments made by PNM to replace generating capacities result in higher expenditures, thus exerting pressure on rates, which might negatively impact the company’s operations and cash flows.
Price Performance
In the past six months, shares of PNM Resources have declined 2.5%, narrower than the industry’s decline of 8.9%.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks from the same industry include The AES Corporation (AES - Free Report) , Centrais Eltricas Brasileiras (EBR - Free Report) and Alliant Energy Corporation (LNT - Free Report) , each carrying a Zacks Rank #2 (Buy).
The long-term (three to five years) earnings growth rate of AES, Centrais Eltricas Brasileiras and Alliant Energy is projected at 8.3%, 20.9% and 6.2%, respectively.
The Zacks Consensus Estimate for 2022 EPS of AES, Centrais Eltricas Brasileiras and Alliant Energy has moved up 5.9%, 1.2% and 6.5%, respectively, year over year.
AES, EBR and LNT delivered average earnings surprises of 4.2%, 10% and 5.8%, respectively, in the last four quarters.
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PNM Resources (PNM) Gains on Investment Amid Regulations
PNM Resources, Inc.’s (PNM - Free Report) cost-effective power generation and initiatives to provide reliable, clean energy to customers will drive its performance in the long run.
PNM Resources currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The long-term (three to five years) earnings growth rate is pegged at 4.2%. The Zacks Consensus Estimate for 2022 earnings per share (EPS) suggests 6.1% year-over-year growth. Moreover, PNM’s current dividend yield of 3% is better than the Zacks S&P 500 composite’s average of 1.9%.
Tailwinds
PNM Resources plans to invest $3.5 billion in the 2022-2025 time period 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 economic expansion and clean energy transition.
PNM Resources has longstanding expertise in complying with environmental regulations. The company 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. It aims to become carbon neutral before 2045.
PNM Resources had $320.1 million liquidity as of Jul 29, 2022, which is enough to meet short-term obligations. Its times interest earned ratio (“TIE”) was 2.9 at the end of the second quarter of 2022. A TIE greater than one is indicative of the company’s adequate financial flexibility to meet debt obligations.
Headwinds
PNM Resources signed a merger deal with AVANGRID but there is uncertainty regarding deal completion. The ongoing delay in the completion of the merger can lower the desired returns for the companies.
Significant investments made by PNM to replace generating capacities result in higher expenditures, thus exerting pressure on rates, which might negatively impact the company’s operations and cash flows.
Price Performance
In the past six months, shares of PNM Resources have declined 2.5%, narrower than the industry’s decline of 8.9%.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks from the same industry include The AES Corporation (AES - Free Report) , Centrais Eltricas Brasileiras (EBR - Free Report) and Alliant Energy Corporation (LNT - Free Report) , each carrying a Zacks Rank #2 (Buy).
The long-term (three to five years) earnings growth rate of AES, Centrais Eltricas Brasileiras and Alliant Energy is projected at 8.3%, 20.9% and 6.2%, respectively.
The Zacks Consensus Estimate for 2022 EPS of AES, Centrais Eltricas Brasileiras and Alliant Energy has moved up 5.9%, 1.2% and 6.5%, respectively, year over year.
AES, EBR and LNT delivered average earnings surprises of 4.2%, 10% and 5.8%, respectively, in the last four quarters.