Analyzing PPL (NYSE:PPL) & TXNM Energy (NYSE:TXNM)

TXNM Energy (NYSE:TXNM) and PPL (NYSE:PPL) are both energy companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, earnings, analyst recommendations, institutional ownership, dividends, risk and profitability.

Analyst Ratings

This is a summary of current ratings and price targets for TXNM Energy and PPL, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TXNM Energy	0	2	5	0	2.71
PPL	0	3	6	1	2.80

TXNM Energy currently has a consensus target price of $53.57, suggesting a potential upside of 1.10%. PPL has a consensus target price of $35.70, suggesting a potential downside of 0.64%. Given TXNM Energy’s higher probable upside, analysts clearly believe TXNM Energy is more favorable than PPL.

Valuation & Earnings

This table compares TXNM Energy and PPL”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TXNM Energy	$1.97 billion	2.49	$88.35 million	$2.67	19.85
PPL	$8.46 billion	3.14	$888.00 million	$1.21	29.69

PPL has higher revenue and earnings than TXNM Energy. TXNM Energy is trading at a lower price-to-earnings ratio than PPL, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares TXNM Energy and PPL’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
TXNM Energy	9.26%	9.69%	2.26%
PPL	10.49%	8.88%	3.11%

Institutional and Insider Ownership

91.7% of TXNM Energy shares are owned by institutional investors. Comparatively, 77.0% of PPL shares are owned by institutional investors. 1.4% of TXNM Energy shares are owned by insiders. Comparatively, 0.2% of PPL shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Dividends

TXNM Energy pays an annual dividend of $1.63 per share and has a dividend yield of 3.1%. PPL pays an annual dividend of $1.09 per share and has a dividend yield of 3.0%. TXNM Energy pays out 61.0% of its earnings in the form of a dividend. PPL pays out 90.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. TXNM Energy is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk and Volatility

TXNM Energy has a beta of 0.15, meaning that its share price is 85% less volatile than the S&P 500. Comparatively, PPL has a beta of 0.65, meaning that its share price is 35% less volatile than the S&P 500.

Summary

PPL beats TXNM Energy on 10 of the 17 factors compared between the two stocks.

About TXNM Energy

TXNM Energy, Inc., through its subsidiaries, provides electricity and electric services 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 engages in the generation, transmission, and distribution of electricity. The segment owns and leases communications, office and other equipment, office space, vehicles, and real estate. It generates electricity using coal, natural gas and oil, and nuclear fuel and waste, as well as solar, wind, geothermal, and battery storage energy sources. The TNMP segment provides regulated transmission and distribution services. The segment also owns and leases vehicles, service facilities, and office locations throughout its service territory. The company serves residential, commercial, and industrial customers and end-users of electricity in New Mexico and Texas. The company was formerly known as PNM Resources, Inc and changed its name to TXNM Energy, Inc. in August 2024. TXNM Energy, Inc. was founded in 1882 and is based in Albuquerque, New Mexico.

About PPL

PPL Corporation, an energy company, focuses on providing electricity and natural gas to approximately 3.6 million customers in the United States. It operates through three segments: Kentucky Regulated, Pennsylvania Regulated, and Rhode Island Regulated. The company delivers electricity to customers in Pennsylvania, Kentucky, Virginia, and Rhode Island; delivers natural gas to customers in Kentucky and Rhode Island; and generates electricity from power plants in Kentucky. PPL Corporation was founded in 1920 and is headquartered in Allentown, Pennsylvania.