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PNM Resources, Inc. (PNM)

Company Dividend Discount ModelIndustry: Regulated ElectricSector: Utilities

Valuation Snapshot

Stable Growth$45.94 - $122.64$70.38
Multi-Stage$32.61 - $35.56$34.05
Blended Fair Value$52.22
Current Price$40.70
Upside28.30%
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 Rate9.08%9.08%9.08%
Growth Rate5.50%6.50%7.50%
Fair Value$45.94$70.38$122.64
Upside / Downside12.87%72.93%201.32%

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 Rate9.08%9.08%9.08%
Growth Rate5.50%6.50%7.50%
Year 1 PV (M)109.56110.60111.63
Year 2 PV (M)116.65118.87121.12
Year 3 PV (M)123.16126.70130.30
Year 4 PV (M)129.12134.09139.20
Year 5 PV (M)134.56141.06147.81
PV of Terminal Value (M)2,342.852,456.022,573.51
Equity Value (M)2,955.913,087.333,223.56
Shares Outstanding (M)90.6690.6690.66
Fair Value$32.61$34.05$35.56
Upside / Downside-19.89%-16.33%-12.64%

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