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PNM Resources Boosts Assets, to Invest $3.9 B in Next 5 Years

Zacks Equity Research

PNM Resources, Inc. PNM long-term investment plans and focus on developing strategies to provide reliable and affordable clean power will boost its performance.

Earnings estimates for the company for 2019 and 2020 rose 5% and 5.24% on a year-over-year basis to $2.10 and $2.21 per share, respectively. Revenue estimates for 2019 and 2020 moved up 1.84% and 3.14% on a year-over-year basis to $1.46 billion and $1.51 billion, respectively.

Let’s take a look at the factors that are working in favor of this Zacks Rank #2 (Buy) utility company. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Systematic Investments

The company continues to invest substantially in its utility assets to provide reliable services to its customers. From 2016 to 2018, PNM and TNMP collectively invested $1,501.7 million in a utility plant that includes substations, power plants, nuclear fuel as well as transmission and distribution systems. It plans to invest $3.9 billion from 2019 to 2023 and expects rate-based compound annual growth of 9.6% over the same period. The expenditure is $300 million higher than the previous plan.

Return & Dividend Yield

In the past 12 months, PNM Resources’ shares have rallied 16.1% compared with the industry’s growth of 11.3%.

Currently, the company has a dividend yield of 2.38% compared with the Zacks S&P 500 composite’s 1.83%.

Earnings Surprise History & Long-Term Growth

The company’s average four-quarter positive earnings surprise is 9.57%.

The company’s long-term (three to five years) earnings growth is pegged at 5.60%.

Environmental Awareness

PNM Resources has a long-standing expertise in fulfilling environmental regulations. The company is focused on developing cost-effective power generation units to provide reliable and affordable power, while transitioning to a coal-free generating portfolio by 2031. PNM Resources is preparing its system to meet New Mexico’s increasing renewable energy requirements in a cost-effective manner.

Stocks to Consider

Some better-ranked stocks from the same industry are Eversource Energy ES, American Electric Power Company, Inc AEP and Fortis Inc FTS. All the three stocks hold a Zacks Rank #2 (Buy).

Long-term earnings growth of Eversource, American Electric Power and Fortis is pegged at 5.6%, 5.6% and 5.7%, respectively.

Eversource, American Electric Power and Fortis delivered an average positive earnings surprise of 2.39%, 5% and 4.14% in the last four quarters, respectively.

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PNM Resources, Inc. (Holding Co.) (PNM) : Free Stock Analysis Report
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