Great Plains Energy (NYSE: GXP) and PNM Resources (NYSE:PNM) are both mid-cap utilities companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, valuation, analyst recommendations, risk, profitability, institutional ownership and earnings.
Valuation & Earnings
This table compares Great Plains Energy and PNM Resources’ gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Great Plains Energy||$2.71 billion||2.55||-$106.20 million||$1.74||18.39|
|PNM Resources||$1.45 billion||2.15||$80.40 million||$1.94||20.08|
PNM Resources has lower revenue, but higher earnings than Great Plains Energy. Great Plains Energy is trading at a lower price-to-earnings ratio than PNM Resources, indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
Great Plains Energy has a beta of 0.35, suggesting that its stock price is 65% less volatile than the S&P 500. Comparatively, PNM Resources has a beta of 0.27, suggesting that its stock price is 73% less volatile than the S&P 500.
Great Plains Energy pays an annual dividend of $1.10 per share and has a dividend yield of 3.4%. PNM Resources pays an annual dividend of $1.06 per share and has a dividend yield of 2.7%. Great Plains Energy pays out 63.2% 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. Great Plains Energy has raised its dividend for 7 consecutive years and PNM Resources has raised its dividend for 6 consecutive years. Great Plains Energy is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This table compares Great Plains Energy and PNM Resources’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Great Plains Energy||-2.26%||5.52%||2.02%|
Insider and Institutional Ownership
88.9% of Great Plains Energy shares are owned by institutional investors. Comparatively, 90.6% of PNM Resources shares are owned by institutional investors. 0.4% of Great Plains Energy 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 hedge funds, large money managers and endowments believe a company is poised for long-term growth.
This is a summary of recent recommendations and price targets for Great Plains Energy and PNM Resources, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Great Plains Energy||0||2||5||0||2.71|
Great Plains Energy currently has a consensus price target of $31.40, indicating a potential downside of 1.84%. PNM Resources has a consensus price target of $38.81, indicating a potential downside of 0.36%. Given PNM Resources’ higher possible upside, analysts clearly believe PNM Resources is more favorable than Great Plains Energy.
PNM Resources beats Great Plains Energy on 10 of the 17 factors compared between the two stocks.
Great Plains Energy Company Profile
Great Plains Energy Incorporated, through its subsidiaries, generates, transmits, distributes, and sells electricity. It also provides regulated steam services in St. Joseph, Missouri. The company generates electricity using coal, nuclear, natural gas, oil, wind, solar, landfill gas, and hydroelectric resources. It has approximately 6,500 megawatts of generating capacity. The company sells electricity to approximately 867,100 customers in western Missouri and eastern Kansas, including approximately 764,200 residences and 100,400 commercial firms, as well as 2,500 industrials, municipalities, and other electric utilities. Great Plains Energy Incorporated was founded in 1919 and is headquartered in Kansas City, Missouri.
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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