Reviewing Avangrid (NYSE:AGR) and TXNM Energy (NYSE:TXNM)

TXNM Energy (NYSE:TXNM) and Avangrid (NYSE:AGR) are both oils/energy companies, but which is the superior business? We will contrast the two businesses based on the strength of their valuation, profitability, dividends, analyst recommendations, earnings, institutional ownership and risk.

Institutional and Insider Ownership

91.7% of TXNM Energy shares are held by institutional investors. Comparatively, 13.1% of Avangrid shares are held by institutional investors. 1.4% of TXNM Energy shares are held by insiders. Comparatively, 0.1% of Avangrid shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Dividends

TXNM Energy pays an annual dividend of $1.63 per share and has a dividend yield of 3.5%. Avangrid pays an annual dividend of $1.76 per share and has a dividend yield of 4.9%. TXNM Energy pays out 84.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Avangrid pays out 60.5% of its earnings in the form of a dividend. Avangrid is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TXNM Energy	$1.91 billion	2.24	$88.35 million	$1.92	24.60
Avangrid	$8.71 billion	1.60	$786.00 million	$2.91	12.38

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

Risk and Volatility

TXNM Energy has a beta of 0.4, suggesting that its stock price is 60% less volatile than the S&P 500. Comparatively, Avangrid has a beta of 0.56, suggesting that its stock price is 44% less volatile than the S&P 500.

Profitability

This table compares TXNM Energy and Avangrid’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%
Avangrid	12.89%	5.37%	2.46%

Analyst Recommendations

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TXNM Energy	0	2	3	0	2.60
Avangrid	1	1	0	0	1.50

TXNM Energy presently has a consensus target price of $52.00, indicating a potential upside of 10.08%. Avangrid has a consensus target price of $35.00, indicating a potential downside of 2.83%. Given TXNM Energy’s stronger consensus rating and higher probable upside, analysts plainly believe TXNM Energy is more favorable than Avangrid.

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 Avangrid

Avangrid, Inc., an energy services holding company, engages in the regulated energy transmission and distribution, and renewable energy generation businesses in the United States. The company operates through Networks and Renewables segments. It is involved in the generation, transmission, and distribution of electricity; and distribution, transportation, and sale of natural gas. In addition, the company operates renewable energy generation facilities primarily using onshore wind power, as well as solar, biomass, and thermal power. Further, it delivers natural gas and electricity to residential, commercial, and institutional customers through its regulated utilities in New York, Maine, Connecticut, and Massachusetts; and sells its output to investor-owned utilities, public utilities, and other credit-worthy entities, as well as generates and provides power and other services to federal and state agencies, institutional retail, and joint action agencies. Additionally, the company delivers thermal output to wholesale customers in the Western United States. It owns eight electric and natural gas utilities, serving 3.3 million customers in New York and New England, as well as owns and operates 9.3 gigawatts of electricity capacity primarily through wind power in 22 states. Avangrid, Inc. was incorporated in 1997 and is headquartered in Orange, Connecticut. The company operates as a subsidiary of Iberdrola, S.A.