PNM Resources (PNM Resources) Intrinsic Value: DCF (Dividends Based) : $18.59 (As of Apr. 27, 2024)

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What is PNM Resources Intrinsic Value: DCF (Dividends Based)?

As of today (2024-04-27), PNM Resources's intrinsic value calculated from the Discounted Dividend model is $18.59.

Note: Discounted Dividend model is only suitable for companies who have a consistant distribution history. If the company's dividends does not remain steady over a long period, results may not be accurate due to the low consistency. The model is also only suitable for predictable companies (Business Predictability Rank higher than 1-Star) with dividend payments. If the company's Predictability Rank is 1-Star or Not Rated, or if the company does not pay dividend, the data will not be stored into our database.

PNM Resources's Predictability Rank is 1.5-Stars.

Margin of Safety % (DCF Dividends Based) using Discounted Dividend Model for PNM Resources is -95.37%.

The historical rank and industry rank for PNM Resources's Intrinsic Value: DCF (Dividends Based) or its related term are showing as below:

PNM' s Price-to-DCF (Dividends Based) Range Over the Past 10 Years
Min: 1.14 Med: 1.6 Max: 2.06
Current: 1.95

During the past 13 years, the highest Price-to-Intrinsic-Value-DCF (Dividends Based) Ratio of PNM Resources was 2.06. The lowest was 1.14. And the median was 1.60.

PNM's Price-to-DCF (Dividends Based) is ranked worse than
83.87% of 93 companies
in the Utilities - Regulated industry
Industry Median: 1.15 vs PNM: 1.95

PNM Resources Intrinsic Value: DCF (Dividends Based) Historical Data

The historical data trend for PNM Resources's Intrinsic Value: DCF (Dividends Based) can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

PNM Resources Intrinsic Value: DCF (Dividends Based) Chart

PNM Resources Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Intrinsic Value: DCF (Dividends Based)

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42.68

20.21

PNM Resources Quarterly Data
	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
Intrinsic Value: DCF (Dividends Based)	Get a 7-Day Free Trial															42.68	44.37	42.80	24.91	20.21

Competitive Comparison of PNM Resources's Intrinsic Value: DCF (Dividends Based)

For the Utilities - Regulated Electric subindustry, PNM Resources's Price-to-DCF (Dividends Based), along with its competitors' market caps and Price-to-DCF (Dividends Based) data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

PNM Resources's Price-to-DCF (Dividends Based) Distribution in the Utilities - Regulated Industry

For the Utilities - Regulated industry and Utilities sector, PNM Resources's Price-to-DCF (Dividends Based) distribution charts can be found below:

* The bar in red indicates where PNM Resources's Price-to-DCF (Dividends Based) falls into.

PNM Resources Intrinsic Value: DCF (Dividends Based) Calculation

This is the intrinsic value calculated from the Discounted Dividend Model with default parameters. The calculation method is the same as Discounted Cash Flow model except adjusted dividend are used in the calculation instead of free cash flow. This is the default method of calculation with GuruFocus DCF calculator.

Usually a two-stage model is used in calculating the intrinsic value with discounted cash flow model. The first stage is called growth stage; the second is called the terminal stage. In the growth stage the company grows at a faster rate. Because it cannot grow at that rate forever, a lower rate is used for the terminal stage.

GuruFocus DDM calculator is a two-stage model. The default values are defined as:

1. Discount Rate: d = 11%
A reasonable discount rate assumption should be at least the long term average return of the stock market, which can be estimated from risk free rate plus risk premium of stock market. GuruFocus uses 10-Year Treasury Constant Maturity Rate as the risk-free rate and rounded up to the nearest integer. It is updated daily. The current risk-free rate is 4.66%. Please go to Economic Indicators page for more information. Please note that we use the 10-Year Treasury Constant Maturity Rate of the country/region where the company is headquartered. If the data for that country/region is not available, then we will use the 10-Year Treasury Constant Maturity Rate of the United States as default. Then we added a risk premium of 6% to get the estimated discount rate. Some investors use their expected rate of return, which is also reasonable. A typical discount rate can be anywhere between 6% - 20%.

2. Dividend Growth Rate in the growth stage: g1 = 8.50%
The Growth Rate in the growth stage is initially set as the default 10-Year Dividend Growth Rate. In cases where the 10-year growth rate is unavailable, it defaults to using the 5-Year Dividend Growth Rate. If both the 10-year and 5-year growth rates are unavailable, the system defaults to the 3-Year Dividend Growth Rate.
However, it's important to note that there is a growth rate range. If the calculated growth rate exceeds 20%, it will be capped at 20%. Conversely, if the calculated growth rate falls below 5%, it will be adjusted to 5% to maintain a reasonable range.
=> PNM Resources's average Dividend Growth Rate in the past 10 years was 8.50%, which is between 5% and 20%. => GuruFocus defaults => Growth Rate: 8.50%

3. Years of Growth Stage: y1 = 10

4. Terminal Growth Rate: g2 = 4%

5. Dividends per Share: adjusted dividends per share = $1.2816.
GuruFocus uses adjusted dividends per share by default to ensure that the valuation reflects the total value of the company, as the actual dividend is only a portion of the total value.

All of the default settings can be changed in the DCF calculator and the results are calculated automatically.

PNM Resources's Intrinsic Value: DCF (Dividends Based) for today is calculated as:

Intrinsic Value: DCF (Dividends Based)	=	Dividends per Share	*	{[(1+g1)/(1+d)	+	(1+g1)^2/(1+d)^2	+	...	+	(1+g1)^10/(1+d)^10]
	+	(1+g1)^10/(1+d)^10	*	[(1+g2)/(1+d)	+	(1+g2)^2/(1+d)^2	+	...	+	(1+g2)^10/(1+d)^10]}

set x = (1+g1)/(1+d) = (1+0.085)/(1+0.11) = 0.97747747747748
and y = (1+g2)/(1+d) = (1+0.04)/(1+0.11) = 0.93693693693694

Intrinsic Value: DCF (Dividends Based)

Dividends per Share

{[x

x^2

...

x^10]

x^10

y^2

...

y^10]}

Dividends per Share

(1-x^10)

(1-x)

x^10

(1-y^10)

(1-y)]

1.2816

14.5043

18.59

Margin of Safety % (DCF Dividends Based)	=	(Intrinsic Value: DCF (Dividends Based)	-	Current Price)	/	Intrinsic Value: DCF (Dividends Based)
	=	(18.59	-	36.32)	/	18.59
	=	-95.37 %

PNM Resources (NYSE:PNM) Intrinsic Value: DCF (Dividends Based) Explanation

Unlike valuation methods such as Net Current Asset Value, Tangible Book per Share, Graham Number, Median PS Value etc, discounted Dividends model evaluates the companies based on their power of future dividend distribution instead of their assets.

Be Aware

What you need to know about Discounted Dividends model:

1. The Discounted Dividends model evaluates a company based on its future dividends distribution power
2. Dividend growth is taken into account; therefore a company with a higher dividend growth rate is worth more if everything else is the same.
3. Since we are projecting future growth, it is assumed that the company will grow at the same rate as it did during the past 10 years. Therefore this model works better for the companies with consistently steady dividends distributed.
4. The Discounted Dividends model works poorly for inconsistent dividends distributor like high growth companies.
5. Your expected return from the investment is a reasonable discount rate assumption.
6. A larger margin of safety should be required for companies with less dividends distributed.

You can screen for stocks that trade below their Intrinsic Value: DCF (FCF Based) and Intrinsic Value: DCF (Earnings Based) and Intrinsic Value: DCF (Dividends Based) with the GuruFocus All-in-One Screener. Companies with a high Predictability Rank that trade at a discount to their Intrinsic Value: DCF (FCF Based) and Intrinsic Value: DCF (Earnings Based) can be found in the screen of Undervalued Predictable Companies.

PNM Resources Intrinsic Value: DCF (Dividends Based) Related Terms

Thank you for viewing the detailed overview of PNM Resources's Intrinsic Value: DCF (Dividends Based) provided by GuruFocus.com. Please click on the following links to see related term pages.

PNM Resources (PNM Resources) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Utilities » Utilities - Regulated » PNM Resources Inc (NYSE:PNM) » Definitions » Intrinsic Value: DCF (Dividends Based)

Comparable Companies

MGEE POR IDA HE GNE VIA SUME OGE PNW EVRG NEE SO DUK LSE:NG. AEP PCG D BOM:532555 EXC PEG

Traded in Other Exchanges

98P:Germany

Address

414 Silver Avenue SW, Albuquerque, NM, USA, 87102-3289

Website

https://www.pnmresources.com

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.

Executives

Elisabeth A Eden	officer: SVP, CFO & Treasurer	414 SILVER AVE SW, MS1295, ALBUQUERQUE NM 87102
Henry E Monroy	officer: VP & Corporate Controller	414 SILVER AVENUE SW, MS1015, ALBUQUERQUE NM 87102-3289
Charles N Eldred	officer: Chief Financial Officer	414 SILVER AVE SW MS 1275, ALBUQUERQUE NM 87102-3289
Joseph Don Tarry	officer: VP and Corporate Controller	414 SILVER AVE SW MS 1205, ALBUQUERQUE NM 87102-3289
Patrick V Apodaca	officer: SR VP, GEN COUNSEL & SECY	414 SILVER AVE SW MS 1275, ALBUQUERQUE NM 87102-3289
Ronald N. Darnell	officer: VICE PRESIDENT, REGULATORY AFF	414 SILVER AVE SW MS 1275, ALBUQUERQUE NM 87102-3289
Vicky A Bailey	director	2099 PENNSYLVANIA AVNUE, NW, SUITE 1000, WASHINGTON DC 20006
James Alton Hughes	director	350 W WASHINGTON STREET, SUITE 600, TEMPE AZ 85281
Norman P. Becker	director	3900 SINGER BOULEVARD N.E., ALBUQUERQUE NM 87109
Chris M Olson	officer: VP, Utility Operations	414 SILVER AVENUE SW, MS 1255, ALBUQUERQUE NM 87102-3289
Adelmo E Archuleta	director	414 SILVER AVE SW MS 1275, ALBUQUERQUE NM 87102-3289
Ronald E Talbot	officer: SR VP, CHIEF OPERATING OFFICER	414 SILVER AVE SW MS 1275, ALBUQUERQUE NM 87102-3289
Bruce W Wilkinson	director	1333 WEST LOOP SOUTH, STE 1700, HOUSTON TX 77027
Sidney M. Gutierrez	director	414 SILVER AVE SW, MS 1275, ALBUQUERQUE NM 87102-3289
Joan B Woodard	director	414 SILVER AVE SW MS 1275, ALBUQUERQUE NM 87102-3289