Ormat Technologies (NYSE: ORA) and PNM Resources (NYSE:PNM) are both mid-cap utilities companies, but which is the better stock? We will contrast the two businesses based on the strength of their valuation, dividends, institutional ownership, profitability, analyst recommendations, earnings and risk.
Institutional & Insider Ownership
46.3% of Ormat Technologies shares are owned by institutional investors. Comparatively, 92.2% of PNM Resources shares are owned by institutional investors. 14.7% of Ormat Technologies shares are owned by company insiders. Comparatively, 1.3% of PNM Resources shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
This table compares Ormat Technologies and PNM Resources’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Valuation and Earnings
This table compares Ormat Technologies and PNM Resources’ revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Ormat Technologies||$662.59 million||4.97||$93.93 million||$2.33||27.92|
|PNM Resources||$1.36 billion||2.30||$117.37 million||$1.99||19.80|
PNM Resources has higher revenue and earnings than Ormat Technologies. PNM Resources is trading at a lower price-to-earnings ratio than Ormat Technologies, indicating that it is currently the more affordable of the two stocks.
This is a summary of current recommendations and price targets for Ormat Technologies and PNM Resources, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Ormat Technologies currently has a consensus price target of $67.83, indicating a potential upside of 4.28%. PNM Resources has a consensus price target of $38.99, indicating a potential downside of 1.04%. Given Ormat Technologies’ stronger consensus rating and higher probable upside, analysts plainly believe Ormat Technologies is more favorable than PNM Resources.
Risk and Volatility
Ormat Technologies has a beta of 1.23, meaning that its share price is 23% more volatile than the S&P 500. Comparatively, PNM Resources has a beta of 0.36, meaning that its share price is 64% less volatile than the S&P 500.
Ormat Technologies pays an annual dividend of $0.32 per share and has a dividend yield of 0.5%. PNM Resources pays an annual dividend of $0.97 per share and has a dividend yield of 2.5%. Ormat Technologies pays out 13.7% of its earnings in the form of a dividend. PNM Resources pays out 48.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Ormat Technologies has raised its dividend for 5 consecutive years.
Ormat Technologies beats PNM Resources on 13 of the 17 factors compared between the two stocks.
Ormat Technologies Company Profile
Ormat Technologies, Inc. is engaged in the geothermal and recovered energy power business. The Company designs, develops, builds, owns and operates geothermal and recovered energy-based power plants. Its equipment manufacturing operations are located in Israel. It conducts its business activities in two business segments: Electricity segment and Product segment. The Electricity segment develops, builds, owns and operates geothermal and recovered energy-based power plants in the United States and geothermal power plants in other countries around the world, and sells the electricity it generates. The Product Segment designs, manufactures and sells equipment for geothermal and recovered energy-based electricity generation and remote power units, and provide services relating to the engineering, procurement, construction, operation and maintenance of geothermal, and recovered energy-based power plants. It manufactures products that produce electricity from recovered energy or waste heat.
PNM Resources Company Profile
PNM Resources, Inc. (PNMR) is an investor-owned holding company with approximately two regulated utilities providing electricity and electric services in New Mexico and Texas. PNMR’s electric utilities are Public Service Company of New Mexico (PNM) and Texas-New Mexico Power Company (TNMP). It operates in three segments: PNM, TNMP, and Corporate and Other. The Company, through its Website provides information, including news releases, notices of Webcasts, and filings. PNM is an electric utility that provides electric generation, transmission and distribution service to its rate-regulated customers. TNMP is a regulated utility operating in Texas. TNMP provides transmission and distribution services in Texas under the provisions of Texas Electric Choice Act (TECA) and the Texas Public Utility Regulatory Act. The Corporate and Other segment includes PNMR holding company activities, related to corporate level debt and PNMR Services Company.
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