Txnm Energy Inc (NYSE: TXNM)

Sector: Utilities Industry: Utilities - Regulated Electric CIK: 0001108426
Market Cap 5.43 Bn
P/B 3.52
P/E -269.68
P/S 3.24
ROIC (Qtr) 5.09
Div Yield % 1.56
Rev 1y % (Qtr) 13.69
Total Debt (Qtr) 5.71 Bn
Debt/Equity (Qtr) 1.67
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About

Investment thesis

Bull case

  • Operating cash flow of 585.43M provides exceptional 33.15x coverage of minority interest expenses 17.66M, showing strong core operations.
  • Operating cash flow of 585.43M provides strong 70.44x coverage of stock compensation 8.31M, indicating sustainable incentive practices.
  • Strong operating cash flow of 585.43M provides 2.15x coverage of SG&A expenses 272.47M, showing efficient operational cost management.
  • Free cash flow of (642.21M) provides excellent 4.17x coverage of dividends (153.94M), indicating sustainable shareholder returns.
  • Tangible assets of 11.69B provide robust 40.28x coverage of other current liabilities 290.33M, indicating strong asset backing.

Bear case

  • Operating cash flow of 585.43M barely covers its investment activities of (1.26B), with a coverage ratio of -0.46, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • With cash reserves of 32.07M against inventory of 172.99M, the 0.19 cash-to-inventory ratio suggests potential liquidity risks if inventory turnover slows, particularly concerning given current supply chain volatilities.
  • Operating cash flow of 585.43M provides thin coverage of dividend payments of (153.94M) with a -3.80 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Free cash flow of (642.21M) provides weak coverage of capital expenditures of 1.23B, with a -0.52 ratio suggesting additional external financing needs for growth initiatives.
  • Operating earnings of 464.44M show weak coverage of depreciation charges of 470.19M, with a 0.99 ratio indicating high capital intensity and potential reinvestment needs.

Legal Entity Breakdown of Revenue (2024)

Segments Breakdown of Revenue (2024)

Peer comparison

Companies in the Utilities - Regulated Electric
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 NEE Nextera Energy Inc 191.44 Bn 28.01 6.98 95.62 Bn
2 SO Southern Co 97.42 Bn 30.98 4.46 73.75 Bn
3 AEP American Electric Power Co Inc 64.38 Bn 33.83 4.24 0.00 Bn
4 DUK Duke Energy CORP 56.47 Bn 30.61 3.87 89.65 Bn
5 EXC Exelon Corp 48.53 Bn 17.53 2.00 50.08 Bn
6 ETR Entergy Corp /De/ 45.74 Bn 25.29 3.59 30.45 Bn
7 PEG Public Service Enterprise Group Inc 43.93 Bn 35.35 4.41 23.51 Bn
8 XEL Xcel Energy Inc 41.10 Bn 37.21 3.75 35.52 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.60 1.01
EV to Cash from Ops. EV/CFO 20.04 12.45
EV to Debt EV to Debt 1.26 171.92
EV to EBIT EV/EBIT 82.61 19.12
EV to EBITDA EV/EBITDA 13.39 15.67
EV to Free Cash Flow [EV/FCF] EV/FCF 87.53 -28.25
EV to Market Cap EV to Market Cap 1.33 1.84
EV to Revenue EV/Rev 4.29 4.72
Price to Book Value [P/B] P/B 3.52 2.60
Price to Earnings [P/E] P/E -269.68 18.53
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 1.14 1.94
Dividend Payout Ratio % Div Payout % (Qtr) 94.40 62.23
Dividend per Basic Share Div per Share (Qtr) 1.63 2.02
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) -26.81 -218.37
Interest Coverage Int. cover (Qtr) 1.76 2.83
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -4.88 -68.90
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 343.21 73.92
Dividend Growth (1y) % Div 1y % (Qtr) 5.42 4.05
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -0.13 15.47
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 9.66 13.33
EBIT Growth (1y) % EBIT 1y % (Qtr) 19.12 15.81
EBT Growth (1y) % EBT 1y % (Qtr) 19.75 19.29
EPS Growth (1y) % EPS 1y % (Qtr) -10.94 21.26
FCF Growth (1y) % FCF 1y % (Qtr) 5.90 -35.52
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 9.24 11.97
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.18 0.22
Cash Payout Ratio Cash Payout (Qtr) 0.08 0.11
Cash Ratio Cash Ratio (Qtr) 0.03 0.98
Current Ratio Curr Ratio (Qtr) 0.51 2.72
Debt to Equity Ratio Debt/Equity (Qtr) 1.67 1.45
Interest Cover Ratio Int Coverage (Qtr) 1.76 2.83
Times Interest Earned Times Interest Earned (Qtr) 1.76 2.83
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 44.30 37.94
EBIT Margin % EBIT Margin % (Qtr) 22.02 316.94
EBT Margin % EBT Margin % (Qtr) 9.48 14.36
Gross Margin % Gross Margin % (Qtr) 57.60 41.20
Net Profit Margin % Net Margin % (Qtr) 8.40 12.57