Contrasting Eversource Energy (NYSE:ES) & TXNM Energy (NYSE:TXNM)

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

Institutional & Insider Ownership

80.0% of Eversource Energy shares are held by institutional investors. Comparatively, 91.7% of TXNM Energy shares are held by institutional investors. 0.4% of Eversource Energy shares are held by company insiders. Comparatively, 1.4% of TXNM Energy shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Dividends

Eversource Energy pays an annual dividend of $2.86 per share and has a dividend yield of 5.1%. TXNM Energy pays an annual dividend of $1.55 per share and has a dividend yield of 3.3%. Eversource Energy pays out -182.2% of its earnings in the form of a dividend. TXNM Energy pays out 80.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Eversource Energy is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a summary of recent ratings for Eversource Energy and TXNM Energy, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Eversource Energy	2	5	5	0	2.25
TXNM Energy	0	2	3	0	2.60

Eversource Energy presently has a consensus target price of $67.83, indicating a potential upside of 20.46%. TXNM Energy has a consensus target price of $52.00, indicating a potential upside of 10.23%. Given Eversource Energy’s higher probable upside, analysts clearly believe Eversource Energy is more favorable than TXNM Energy.

Risk and Volatility

Eversource Energy has a beta of 0.62, suggesting that its stock price is 38% less volatile than the S&P 500. Comparatively, TXNM Energy has a beta of 0.4, suggesting that its stock price is 60% less volatile than the S&P 500.

Earnings & Valuation

This table compares Eversource Energy 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
Eversource Energy	$11.62 billion	1.78	-$442.24 million	($1.57)	-35.87
TXNM Energy	$1.94 billion	2.19	$88.35 million	$1.92	24.57

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Eversource Energy	-4.73%	10.90%	2.78%
TXNM Energy	9.26%	9.69%	2.26%

About Eversource Energy

Eversource Energy, a public utility holding company, engages in the energy delivery business. The company operates through Electric Distribution, Electric Transmission, Natural Gas Distribution, and Water Distribution segments. It is involved in the transmission and distribution of electricity; solar power facilities; and distribution of natural gas. The company operates regulated water utilities that provide water services to approximately 241,000 customers. It serves residential, commercial, industrial, municipal and fire protection, and other customers in Connecticut, Massachusetts, and New Hampshire. The company was formerly known as Northeast Utilities and changed its name to Eversource Energy in April 2015. Eversource Energy was incorporated in 1927 and is headquartered in Springfield, Massachusetts.

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.