Hydro One (OTCMKTS:HRNNF – Get Free Report) and TXNM Energy (NYSE:TXNM – Get Free Report) are both utilities companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, dividends, risk, valuation, profitability and earnings.
Profitability
This table compares Hydro One and TXNM Energy’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Hydro One | 14.88% | 11.02% | 3.56% |
| TXNM Energy | 9.04% | 8.11% | 2.34% |
Analyst Recommendations
This is a breakdown of recent recommendations and price targets for Hydro One and TXNM Energy, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Hydro One | 1 | 5 | 1 | 0 | 2.00 |
| TXNM Energy | 0 | 3 | 0 | 0 | 2.00 |
Earnings and Valuation
This table compares Hydro One and TXNM Energy”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Hydro One | $6.47 billion | 3.44 | $958.32 million | $1.71 | 21.71 |
| TXNM Energy | $2.17 billion | 2.93 | $151.89 million | $1.81 | 31.86 |
Hydro One has higher revenue and earnings than TXNM Energy. Hydro One is trading at a lower price-to-earnings ratio than TXNM Energy, indicating that it is currently the more affordable of the two stocks.
Dividends
Hydro One pays an annual dividend of $1.02 per share and has a dividend yield of 2.7%. TXNM Energy pays an annual dividend of $1.69 per share and has a dividend yield of 2.9%. Hydro One pays out 59.6% of its earnings in the form of a dividend. TXNM Energy pays out 93.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Insider & Institutional Ownership
91.7% of TXNM Energy shares are owned by institutional investors. 1.1% of TXNM Energy shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Summary
Hydro One beats TXNM Energy on 8 of the 14 factors compared between the two stocks.
About Hydro One
Hydro One Limited, through its subsidiaries, operates as an electricity transmission and distribution company in Ontario. The company operates through three segments: Transmission, Distribution, and Other. It owns and operates approximately 30,000 circuit kilometers of high-voltage transmission lines and approximately 125,000 circuit kilometers primary low-voltage distribution lines. The company serves residential, small business, commercial, and industrial customers, as well as municipal utilities. It also provides telecommunications support services for its transmission and distribution businesses; and information and communications technology services and solutions. The company was incorporated in 2015 and is headquartered in Toronto, Canada.
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.
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