IDACORP (NYSE: IDA) and PNM Resources, Inc. (Holding Co.) (NYSE:PNM) are both mid-cap utilities companies, but which is the better stock? We will contrast the two companies based on the strength of their valuation, risk, dividends, analyst recommendations, earnings, institutional ownership and profitability.

Profitability

This table compares IDACORP and PNM Resources, Inc. (Holding Co.)’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
IDACORP 15.31% 9.20% 3.20%
PNM Resources, Inc. (Holding Co.) 10.05% 8.57% 2.33%

Dividends

IDACORP pays an annual dividend of $2.20 per share and has a dividend yield of 2.4%. PNM Resources, Inc. (Holding Co.) pays an annual dividend of $0.97 per share and has a dividend yield of 2.3%. IDACORP pays out 55.6% of its earnings in the form of a dividend. PNM Resources, Inc. (Holding Co.) pays out 55.4% 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. IDACORP has raised its dividend for 5 consecutive years and PNM Resources, Inc. (Holding Co.) has raised its dividend for 5 consecutive years.

Institutional and Insider Ownership

76.0% of IDACORP shares are owned by institutional investors. Comparatively, 95.2% of PNM Resources, Inc. (Holding Co.) shares are owned by institutional investors. 0.7% of IDACORP shares are owned by insiders. Comparatively, 1.3% of PNM Resources, Inc. (Holding Co.) shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Volatility and Risk

IDACORP has a beta of 0.51, indicating that its share price is 49% less volatile than the S&P 500. Comparatively, PNM Resources, Inc. (Holding Co.) has a beta of 0.32, indicating that its share price is 68% less volatile than the S&P 500.

Earnings & Valuation

This table compares IDACORP and PNM Resources, Inc. (Holding Co.)’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
IDACORP $1.30 billion 3.49 $438.95 million $3.96 22.74
PNM Resources, Inc. (Holding Co.) $1.43 billion 2.37 $569.83 million $1.75 24.29

PNM Resources, Inc. (Holding Co.) has higher revenue and earnings than IDACORP. IDACORP is trading at a lower price-to-earnings ratio than PNM Resources, Inc. (Holding Co.), indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent ratings for IDACORP and PNM Resources, Inc. (Holding Co.), as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
IDACORP 0 2 0 0 2.00
PNM Resources, Inc. (Holding Co.) 1 8 1 0 2.00

IDACORP presently has a consensus price target of $75.00, indicating a potential downside of 16.72%. PNM Resources, Inc. (Holding Co.) has a consensus price target of $37.74, indicating a potential downside of 11.20%. Given PNM Resources, Inc. (Holding Co.)’s higher possible upside, analysts clearly believe PNM Resources, Inc. (Holding Co.) is more favorable than IDACORP.

Summary

IDACORP beats PNM Resources, Inc. (Holding Co.) on 8 of the 15 factors compared between the two stocks.

About IDACORP

IDACORP, Inc. is a holding company. The Company’s principal operating subsidiary is Idaho Power Company (Idaho Power). The Company’s segment is utility operations. The utility operations segment’s primary source of revenue is the regulated operations of Idaho Power. Idaho Power is an electric utility engaged in the generation, transmission, distribution, sale and purchase of electric energy and capacity. Idaho Power is the parent of Idaho Energy Resources Co. (IERCo), a joint venturer in Bridger Coal Company, which mines and supplies coal to the Jim Bridger generating plant owned in part by Idaho Power. Its subsidiaries also include IDACORP Financial Services, Inc., an investor in affordable housing and other real estate investments, and Ida-West Energy Company, an operator of small hydroelectric generation projects. As of December 31, 2016, Idaho Power provided electric utility service to approximately 535,000 general business customers in southern Idaho and eastern Oregon.

About PNM Resources, Inc. (Holding Co.)

PNM Resources, Inc. (PNMR) is an investor-owned holding company with approximately two regulated utilities providing electricity and electric services in New Mexico and Texas. PNMR’s electric utilities are Public Service Company of New Mexico (PNM) and Texas-New Mexico Power Company (TNMP). It operates in three segments: PNM, TNMP, and Corporate and Other. The Company, through its Website provides information, including news releases, notices of Webcasts, and filings. PNM is an electric utility that provides electric generation, transmission and distribution service to its rate-regulated customers. TNMP is a regulated utility operating in Texas. TNMP provides transmission and distribution services in Texas under the provisions of Texas Electric Choice Act (TECA) and the Texas Public Utility Regulatory Act. The Corporate and Other segment includes PNMR holding company activities, related to corporate level debt and PNMR Services Company.

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