An Examination of Dividend History, Yield, Growth, and Sustainability
PNM Resources Inc (PNM, Financial) recently announced a dividend of $0.37 per share, payable on 2023-11-10, with the ex-dividend date set for 2023-10-26. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's delve into PNM Resources Inc's dividend performance and assess its sustainability.
Understanding PNM Resources Inc's Business Model
PNM Resources Inc, or PNMR, is a holding company that owns regulated utilities companies providing electricity and electric services. PNMR segments its operations by its two subsidiaries, PNM and TNMP. PNM provides electric generation, transmission, and distribution services mainly to areas of New Mexico. While PNM uses a variety of fuel sources across its power plant portfolio, its coal and gas-fueled sites produce most of the energy. TNMP owns and operates transmission and distribution services primarily in small to medium-sized communities in Texas. Both subsidiaries generate revenue for PNMR through the sale of electricity and transmission service fees fairly evenly split between residential and commercial customers. PNM generates the vast majority of PNMR's total revenue.
PNM Resources Inc's Dividend History: A Consistent Record
PNM Resources Inc has maintained a consistent dividend payment record since 1996. Dividends are currently distributed on a quarterly basis. PNM Resources Inc has increased its dividend each year since 2009. The stock is thus listed as a dividend achiever, an honor that is given to companies that have increased their dividend each year for at least the past 14 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
PNM Resources Inc's Dividend Yield and Growth: A Closer Look
As of today, PNM Resources Inc currently has a 12-month trailing dividend yield of 3.27% and a 12-month forward dividend yield of 3.31%. This suggests an expectation of increased dividend payments over the next 12 months. Over the past three years, PNM Resources Inc's annual dividend growth rate was 6.20%. Extended to a five-year horizon, this rate increased to 7.40% per year. And over the past decade, PNM Resources Inc's annual dividends per share growth rate stands at 9.40%. Based on PNM Resources Inc's dividend yield and five-year growth rate, the 5-year yield on cost of PNM Resources Inc stock as of today is approximately 4.67%.
Is PNM Resources Inc's Dividend Sustainable? Assessing Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-06-30, PNM Resources Inc's dividend payout ratio is 0.52. PNM Resources Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks PNM Resources Inc's profitability 8 out of 10 as of 2023-06-30, suggesting good profitability prospects. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.
PNM Resources Inc's Growth Metrics: A Positive Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. PNM Resources Inc's growth rank of 8 out of 10 suggests that the company's growth trajectory is good relative to its competitors. Revenue is the lifeblood of any company, and PNM Resources Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. PNM Resources Inc's revenue has increased by approximately 12.70% per year on average, a rate that outperforms than approximately 69.34% of global competitors. The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, PNM Resources Inc's earnings increased by approximately 26.60% per year on average, a rate that outperforms than approximately 81.04% of global competitors. Lastly, the company's 5-year EBITDA growth rate of 20.20%, which outperforms than approximately 82.11% of global competitors.
Conclusion: A Promising Dividend Prospect
In conclusion, PNM Resources Inc presents a compelling case for dividend investors. The company's consistent dividend payments, robust dividend growth rate, reasonable payout ratio, high profitability, and strong growth metrics suggest a promising future for its dividends. Investors seeking a reliable income stream should consider PNM Resources Inc as a potential addition to their portfolios. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
