Comparing TXNM Energy (NYSE:TXNM) and Hawaiian Electric Industries (NYSE:HE)

Hawaiian Electric Industries (NYSE:HE) and TXNM Energy (NYSE:TXNM) are both utilities companies, but which is the superior business? We will contrast the two businesses based on the strength of their valuation, profitability, dividends, risk, institutional ownership, earnings and analyst recommendations.

Insider and Institutional Ownership

59.9% of Hawaiian Electric Industries shares are owned by institutional investors. Comparatively, 91.7% of TXNM Energy shares are owned by institutional investors. 0.3% of Hawaiian Electric Industries shares are owned by company insiders. Comparatively, 1.4% of TXNM Energy shares are owned by company 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.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Hawaiian Electric Industries	-35.38%	11.12%	1.19%
TXNM Energy	9.26%	9.69%	2.26%

Analyst Ratings

This is a breakdown of current ratings and target prices for Hawaiian Electric Industries and TXNM Energy, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hawaiian Electric Industries	0	4	0	0	2.00
TXNM Energy	0	2	4	0	2.67

Hawaiian Electric Industries currently has a consensus price target of $10.50, suggesting a potential upside of 4.29%. TXNM Energy has a consensus price target of $52.33, suggesting a potential upside of 4.38%. Given TXNM Energy’s stronger consensus rating and higher probable upside, analysts clearly believe TXNM Energy is more favorable than Hawaiian Electric Industries.

Earnings & Valuation

This table compares Hawaiian Electric Industries and TXNM Energy”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hawaiian Electric Industries	$3.69 billion	0.47	$201.13 million	($11.83)	-0.85
TXNM Energy	$1.94 billion	2.33	$88.35 million	$1.92	26.11

Hawaiian Electric Industries has higher revenue and earnings than TXNM Energy. Hawaiian Electric Industries 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

Hawaiian Electric Industries has a beta of 0.53, indicating that its share price is 47% less volatile than the S&P 500. Comparatively, TXNM Energy has a beta of 0.4, indicating that its share price is 60% less volatile than the S&P 500.

Dividends

Hawaiian Electric Industries pays an annual dividend of $1.44 per share and has a dividend yield of 14.3%. TXNM Energy pays an annual dividend of $1.63 per share and has a dividend yield of 3.3%. Hawaiian Electric Industries pays out -12.2% of its earnings in the form of a dividend. 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. Hawaiian Electric Industries is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

TXNM Energy beats Hawaiian Electric Industries on 10 of the 16 factors compared between the two stocks.

About Hawaiian Electric Industries

Hawaiian Electric Industries, Inc., together with its subsidiaries, engages in the electric utility businesses in the United States. It operates in three segments: Electric Utility, Bank, and Other. The Electric Utility segment engages in the production, purchase, transmission, distribution, and sale of electricity in the islands of Oahu, Hawaii, Maui, Lanai, and Molokai. Its renewable energy sources and potential sources include wind, solar, photovoltaic, geothermal, wave, hydroelectric, municipal waste, and other biofuels. This segment serves suburban communities, resorts, the United States Armed Forces installations, and agricultural operations. The Bank segment operates a federally chartered savings bank that offers banking and other financial services to consumers and businesses, including savings and checking accounts; and loans comprising residential and commercial real estate, residential mortgage, construction and development, multifamily residential and commercial real estate, consumer, and commercial loans. The Other segment invests in non-regulated renewable energy and sustainable infrastructure in the State of Hawaii. Hawaiian Electric Industries, Inc. was founded in 1891 and is headquartered in Honolulu, Hawaii.

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.