Critical Contrast: Pacific Gas & Electric (NYSE:PCG) & TXNM Energy (NYSE:TXNM)

Pacific Gas & Electric (NYSE:PCG) and TXNM Energy (NYSE:TXNM) are both utilities companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, profitability, analyst recommendations, valuation, institutional ownership, risk and dividends.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Pacific Gas & Electric and TXNM Energy, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Pacific Gas & Electric	0	9	7	0	2.44
TXNM Energy	0	0	1	0	3.00

Pacific Gas & Electric currently has a consensus target price of $17.14, indicating a potential upside of 32.37%. Given Pacific Gas & Electric’s higher probable upside, analysts plainly believe Pacific Gas & Electric is more favorable than TXNM Energy.

Insider and Institutional Ownership

78.6% of Pacific Gas & Electric shares are owned by institutional investors. Comparatively, 91.7% of TXNM Energy shares are owned by institutional investors. 0.2% of Pacific Gas & Electric shares are owned by insiders. Comparatively, 1.1% of TXNM Energy shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Pacific Gas & Electric and TXNM Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Pacific Gas & Electric	12.00%	11.49%	2.57%
TXNM Energy	9.04%	8.11%	2.34%

Volatility and Risk

Pacific Gas & Electric has a beta of 0.28, indicating that its stock price is 72% less volatile than the S&P 500. Comparatively, TXNM Energy has a beta of 0.17, indicating that its stock price is 83% less volatile than the S&P 500.

Earnings and Valuation

This table compares Pacific Gas & Electric and TXNM Energy”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Pacific Gas & Electric	$24.93 billion	1.39	$2.70 billion	$1.35	9.59
TXNM Energy	$2.17 billion	2.98	$151.89 million	$1.81	32.38

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

Dividends

Pacific Gas & Electric pays an annual dividend of $0.20 per share and has a dividend yield of 1.5%. TXNM Energy pays an annual dividend of $1.69 per share and has a dividend yield of 2.9%. Pacific Gas & Electric pays out 14.8% of its earnings in the form of a dividend. TXNM Energy pays out 93.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Pacific Gas & Electric has increased its dividend for 1 consecutive years.

Summary

Pacific Gas & Electric beats TXNM Energy on 10 of the 17 factors compared between the two stocks.

About Pacific Gas & Electric

PG&E Corp. operates as a holding company, which engages in generation, transmission, and distribution of electricity and natural gas to customers. It specializes in energy, utility, power, gas, electricity, solar and sustainability. The company was founded in 1995 and is headquartered in Oakland, CA.

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.