Comparing TXNM Energy (NYSE:TXNM) & FirstEnergy (NYSE:FE)

TXNM Energy (NYSE:TXNM) and FirstEnergy (NYSE:FE) are both energy companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, risk, analyst recommendations, institutional ownership, dividends, valuation and profitability.

Insider and Institutional Ownership

91.7% of TXNM Energy shares are held by institutional investors. Comparatively, 89.4% of FirstEnergy shares are held by institutional investors. 1.3% of TXNM Energy shares are held by insiders. Comparatively, 0.2% of FirstEnergy shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Volatility & Risk

TXNM Energy has a beta of 0.11, meaning that its share price is 89% less volatile than the S&P 500. Comparatively, FirstEnergy has a beta of 0.42, meaning that its share price is 58% less volatile than the S&P 500.

Dividends

TXNM Energy pays an annual dividend of $1.63 per share and has a dividend yield of 3.1%. FirstEnergy pays an annual dividend of $1.78 per share and has a dividend yield of 4.1%. TXNM Energy pays out 61.0% of its earnings in the form of a dividend. FirstEnergy pays out 94.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Profitability

This table compares TXNM Energy and FirstEnergy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
TXNM Energy	9.26%	9.69%	2.26%
FirstEnergy	6.64%	11.38%	2.93%

Analyst Recommendations

This is a summary of current recommendations for TXNM Energy and FirstEnergy, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TXNM Energy	0	2	5	0	2.71
FirstEnergy	0	9	6	0	2.40

TXNM Energy presently has a consensus price target of $53.57, indicating a potential upside of 2.09%. FirstEnergy has a consensus price target of $46.00, indicating a potential upside of 6.76%. Given FirstEnergy’s higher probable upside, analysts clearly believe FirstEnergy is more favorable than TXNM Energy.

Valuation & Earnings

This table compares TXNM Energy and FirstEnergy”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TXNM Energy	$1.97 billion	2.47	$88.35 million	$2.67	19.65
FirstEnergy	$13.95 billion	1.78	$1.10 billion	$1.88	22.92

FirstEnergy has higher revenue and earnings than TXNM Energy. TXNM Energy is trading at a lower price-to-earnings ratio than FirstEnergy, indicating that it is currently the more affordable of the two stocks.

Summary

FirstEnergy beats TXNM Energy on 9 of the 16 factors compared between the two stocks.

About TXNM Energy

TXNM Energy, Inc., through its subsidiaries, provides electricity and electric services in the United States. It operates through Public Service Company of New Mexico (PNM) and Texas-New Mexico Power Company (TNMP) segments. The PNM segment engages in the generation, transmission, and distribution of electricity. The segment owns and leases communications, office and other equipment, office space, vehicles, and real estate. It generates electricity using coal, natural gas and oil, and nuclear fuel and waste, as well as solar, wind, geothermal, and battery storage energy sources. The TNMP segment provides regulated transmission and distribution services. The segment also owns and leases vehicles, service facilities, and office locations throughout its service territory. The company serves residential, commercial, and industrial customers and end-users of electricity in New Mexico and Texas. The company was formerly known as PNM Resources, Inc and changed its name to TXNM Energy, Inc. in August 2024. TXNM Energy, Inc. was founded in 1882 and is based in Albuquerque, New Mexico.

About FirstEnergy

FirstEnergy Corp., through its subsidiaries, generates, transmits, and distributes electricity in the United States. It operates through Regulated Distribution and Regulated Transmission segments. The company owns and operates coal-fired, nuclear, hydroelectric, wind, and solar power generating facilities. It operates 24,080 circuit miles of overhead and underground transmission lines; and electric distribution systems, including 274,518 miles of overhead pole line and underground conduit carrying primary, secondary, and street lighting circuits. The company serves approximately 6 million customers in Ohio, Pennsylvania, West Virginia, Maryland, New Jersey, and New York. FirstEnergy Corp. was incorporated in 1996 and is headquartered in Akron, Ohio.