U.S. Markets open in 9 hrs 3 mins
  • S&P Futures

    3,968.75
    +6.75 (+0.17%)
     
  • Dow Futures

    33,908.00
    +51.00 (+0.15%)
     
  • Nasdaq Futures

    11,542.75
    +18.00 (+0.16%)
     
  • Russell 2000 Futures

    1,841.90
    +4.10 (+0.22%)
     
  • Crude Oil

    79.09
    +0.89 (+1.14%)
     
  • Gold

    1,768.80
    +5.10 (+0.29%)
     
  • Silver

    21.49
    +0.05 (+0.23%)
     
  • EUR/USD

    1.0361
    +0.0026 (+0.2487%)
     
  • 10-Yr Bond

    3.7480
    +0.0450 (+1.22%)
     
  • Vix

    21.89
    -0.32 (-1.44%)
     
  • GBP/USD

    1.1989
    +0.0039 (+0.3225%)
     
  • USD/JPY

    138.4570
    -0.1770 (-0.1277%)
     
  • BTC-USD

    16,883.46
    +381.52 (+2.31%)
     
  • CMC Crypto 200

    400.92
    +12.20 (+3.14%)
     
  • FTSE 100

    7,512.00
    +37.98 (+0.51%)
     
  • Nikkei 225

    27,915.72
    -112.12 (-0.40%)
     

PNM Resources (PNM) Gains on Investment Amid Regulations

PNM Resources, Inc.’s PNM 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%.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Stocks to Consider

Some better-ranked stocks from the same industry include The AES Corporation AES, Centrais Eltricas Brasileiras EBR and Alliant Energy Corporation LNT, 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.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
The AES Corporation (AES) : Free Stock Analysis Report
 
Alliant Energy Corporation (LNT) : Free Stock Analysis Report
 
PNM Resources, Inc. (PNM) : Free Stock Analysis Report
 
Centrais Eltricas Brasileiras SA (EBR) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research