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PNM Resources (PNM) Announces Earnings Guidance for 2021

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Zacks Equity Research
·3 min read
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PNM Resources, Inc. PNM initiates 2021 earnings per share (EPS) guidance in the range of $2.27-$2.37 and affirmed the ongoing year’s EPS estimate of $2.23-$2.31. The Zacks Consensus Estimate for the same is pegged at $2.27 and $2.28, for 2020 and 2021, respectively. This marks year-over-year increase of 5.09% and 0.44%, respectively.

Also, the company provided segment-wise EPS estimates. Public Service Company of New Mexico and Texas-New Mexico Power Company are expected to generate earnings of $1.63-$1.69 and 77-79 cents, per share, respectively, in 2021. The Corporate and Other segment is likely to incur losses in the range of 11-13 cents.

CAPEX Plans

PNM Resources continues to invest substantially in its utility assets to provide reliable services to its customers. It plans to invest $4.1 billion through 2020 to 2024, with a focus on strengthening the transmission and distribution network, which will lead to 8.9% rate base growth. In 2020 and 2021, the utility expects to invest $807 million and $1,016 million, respectively.

Financial Expectations

The company is planning to opt for more flexible obligations that include early repayment without penalty for its corporate maturities. Also, its EPS guidance for 2021 includes the impact of equity issuance for additional six million shares in December 2020, resulting from the January 2020 forward offering.

Dividend Hike

The utility announced an increase in its 2021 annual dividend to $1.31 per share from 2020’s figure of $1.23, marking a 6.5% hike.This dividend increase marks 11th consecutive increase since 2012. These figures are well within PNM Resources’ dividend growth rate of 5-6% over the 2020-2023 time period and a long-term dividend payout ratio of 50-60%.

Zacks Rank & Price Performance

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

In the past six months, shares of the company have gained 31% compared with the industry’s 4.9% growth.

Stocks to Consider

A few better-ranked electric utilities are Portland General Electric Company POR, Pinnacle West Capital Corporation PNW and Otter Tail Corporation OTTR. While Portland General Electric Company sports a Zacks Rank #1, the other two stocks carry a Zacks Rank of 2 (Buy) at present.

Portland General Electric Company has a long-term (three to five years) earnings growth rate of 5.48%. It has a trailing four-quarter earnings surprise of 98.07%, on average.

Pinnacle West Capital has a long-term earnings growth rate of 3.59%. Its average earnings surprise in the last four quarters is 27.15%.

Otter Tail has a trailing four-quarter earnings surprise of 9.93%, on average. The Zacks Consensus Estimate for 2020 earnings has been revised 1.8% upward in the past 60 days.

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Pinnacle West Capital Corporation (PNW) : Free Stock Analysis Report
 
Portland General Electric Company (POR) : Free Stock Analysis Report
 
Otter Tail Corporation (OTTR) : Free Stock Analysis Report
 
PNM Resources, Inc. (PNM) : Free Stock Analysis Report
 
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