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PNM Resources, Inc. (PNM)

Company Dividend Discount ModelIndustry: Regulated ElectricSector: Utilities

Valuation Snapshot

Stable Growth$45.71 - $121.26$69.89
Multi-Stage$32.50 - $35.45$33.95
Blended Fair Value$51.92
Current Price$40.70
Upside27.57%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS10.49%9.91%1.691.401.321.251.091.030.940.860.780.71
YoY Growth--20.75%5.73%6.08%14.69%6.00%9.37%9.22%10.15%9.92%8.04%
Dividend Yield--4.15%3.74%2.72%2.61%2.22%2.70%2.01%2.24%2.11%2.10%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)176.66
(-) Cash Dividends Paid (M)101.85
(=) Cash Retained (M)74.81
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)35.3322.0813.25
Cash Retained (M)74.8174.8174.81
(-) Cash Required (M)-35.33-22.08-13.25
(=) Excess Retained (M)39.4852.7361.56
(/) Shares Outstanding (M)90.6690.6690.66
(=) Excess Retained per Share0.440.580.68
LTM Dividend per Share1.121.121.12
(+) Excess Retained per Share0.440.580.68
(=) Adjusted Dividend1.561.711.80
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate5.50%6.50%7.50%
Fair Value$45.71$69.89$121.26
Upside / Downside12.31%71.73%197.92%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)176.66188.14200.37213.39227.26242.04249.30
Payout Ratio57.65%64.12%70.59%77.06%83.53%90.00%92.50%
Projected Dividends (M)101.85120.64141.44164.44189.83217.83230.60

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate5.50%6.50%7.50%
Year 1 PV (M)109.54110.58111.62
Year 2 PV (M)116.61118.84121.08
Year 3 PV (M)123.10126.64130.24
Year 4 PV (M)129.04134.00139.11
Year 5 PV (M)134.45140.94147.68
PV of Terminal Value (M)2,334.012,446.752,563.79
Equity Value (M)2,946.763,077.743,213.52
Shares Outstanding (M)90.6690.6690.66
Fair Value$32.50$33.95$35.45
Upside / Downside-20.14%-16.59%-12.91%

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