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TXNM Energy, Inc. (TXNM)

Company Dividend Discount ModelIndustry: Regulated ElectricSector: Utilities

Valuation Snapshot

Stable Growth$32.84 - $65.64$45.63
Multi-Stage$31.30 - $34.11$32.68
Blended Fair Value$39.15
Current Price$56.55
Upside-30.76%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR202420232022202120202019
DPS8.59%0.00%1.521.371.301.221.071.010.000.000.000.00
YoY Growth--10.76%5.73%6.08%14.69%6.00%0.00%0.00%0.00%0.00%0.00%
Dividend Yield--2.84%3.67%2.66%0.00%0.00%0.00%0.00%0.00%0.00%0.00%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)177.45
(-) Cash Dividends Paid (M)153.94
(=) Cash Retained (M)23.51
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)35.4922.1813.31
Cash Retained (M)23.5123.5123.51
(-) Cash Required (M)-35.49-22.18-13.31
(=) Excess Retained (M)-11.981.3310.20
(/) Shares Outstanding (M)92.4392.4392.43
(=) Excess Retained per Share-0.130.010.11
LTM Dividend per Share1.671.671.67
(+) Excess Retained per Share-0.130.010.11
(=) Adjusted Dividend1.541.681.78
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate4.22%5.22%6.22%
Fair Value$32.84$45.63$65.64
Upside / Downside-41.92%-19.31%16.08%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)177.45186.72196.48206.74217.54228.91235.77
Payout Ratio86.75%87.40%88.05%88.70%89.35%90.00%92.50%
Projected Dividends (M)153.94163.20173.00183.38194.37206.02218.09

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate4.22%5.22%6.22%
Year 1 PV (M)148.16149.59151.01
Year 2 PV (M)142.60145.35148.12
Year 3 PV (M)137.23141.22145.29
Year 4 PV (M)132.06137.20142.50
Year 5 PV (M)127.08133.30139.75
PV of Terminal Value (M)2,206.122,314.012,426.07
Equity Value (M)2,893.263,020.663,152.74
Shares Outstanding (M)92.4392.4392.43
Fair Value$31.30$32.68$34.11
Upside / Downside-44.65%-42.21%-39.69%

High-Yield Dividend Screener

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