Critical Analysis: PNM Resources (NYSE:PNM) vs. Korea Electric Power (KEP)

PNM Resources (NYSE: PNM) and Korea Electric Power (NYSE:KEP) are both mid-cap utilities companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, earnings, valuation, analyst recommendations, risk, institutional ownership and dividends.

Valuation and Earnings

This table compares PNM Resources and Korea Electric Power’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
PNM Resources $1.36 billion 2.16 $117.37 million $1.99 18.59
Korea Electric Power $51.76 billion 0.41 $6.34 billion $3.06 5.40

Korea Electric Power has higher revenue and earnings than PNM Resources. Korea Electric Power is trading at a lower price-to-earnings ratio than PNM Resources, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares PNM Resources and Korea Electric Power’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
PNM Resources 11.27% 9.18% 2.49%
Korea Electric Power 5.15% 4.19% 1.72%

Dividends

PNM Resources pays an annual dividend of $1.06 per share and has a dividend yield of 2.9%. Korea Electric Power does not pay a dividend. PNM Resources pays out 53.3% of its earnings in the form of a dividend. PNM Resources has raised its dividend for 6 consecutive years.

Analyst Ratings

This is a summary of recent ratings and price targets for PNM Resources and Korea Electric Power, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
PNM Resources 4 7 1 0 1.75
Korea Electric Power 1 4 2 0 2.14

PNM Resources currently has a consensus target price of $38.40, indicating a potential upside of 3.78%. Given PNM Resources’ higher probable upside, equities research analysts plainly believe PNM Resources is more favorable than Korea Electric Power.

Volatility & Risk

PNM Resources has a beta of 0.36, indicating that its share price is 64% less volatile than the S&P 500. Comparatively, Korea Electric Power has a beta of 0.51, indicating that its share price is 49% less volatile than the S&P 500.

Institutional and Insider Ownership

92.5% of PNM Resources shares are held by institutional investors. Comparatively, 4.7% of Korea Electric Power shares are held by institutional investors. 1.3% of PNM Resources shares are held by company insiders. Comparatively, 1.0% of Korea Electric Power shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Summary

PNM Resources beats Korea Electric Power on 10 of the 17 factors compared between the two stocks.

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.

Korea Electric Power Company Profile

Korea Electric Power Corporation (KEPCO) is an integrated electric utility company engaged in the transmission and distribution of electricity in the Republic of Korea. Its segments include transmission and distribution, nuclear power generation and thermal power generation and all others . The transmission and distribution segment, which is operated by KEPCO, comprise operations related to the transmission, distribution and sale to end-users of electricity. The nuclear power generation segment, which is engaged in the nuclear, hydro, pumping-up power generation. The thermal power generation segment, which is engaged in bituminous coal, anthracite, liquefied natural gas (LNG) power generation. And the Other Segment comprises operations related to the plant design, power generation equipment assembly, nuclear raw materials supplement, electricity IT service, renewable source power generation and financial investment on overseas businesses.

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