TXNM — TXNM Energy · XVARY Snapshot

XVARY Composite Score

73

/ 100

Average

Combines growth, value, risk, and momentum factors into a single institutional-grade score.

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What it is

TXNM runs two regulated electric utilities in New Mexico and Texas.

How it gets paid

Last year TXNM Energy made $2.1B in revenue. Other electric was the main engine at $0.63B, or 30% of sales.

Why it's growing
Revenue grew 9.0% last year. The resulting regular quarterly dividend of $0.4225 per share will be payable on february 13th to shareholders of record on january 30th.

What just happened

Q3 2025 GAAP diluted EPS ~$1.22; electric operating revenues ~$647M.

At a Glance

B++ balance sheet — above average — nothing keeping you up at night

95/100 earnings predictability — you can trust these numbers

29.5x trailing p/e — priced about right

2.9% dividend yield — cash in your pocket every quarter

3.5% return on capital — nothing to write home about

XVARY composite: 73/100 — average

What They Do

TXNM runs two regulated electric utilities in New Mexico and Texas.

PNM serves about 550,000 customers, and TNMP serves more than 270,000 homes and businesses. That is 820,000 hookups tied to poles, wires, and state-set rates. Your lights do not switch providers when the bill annoys you.

utilities mid-cap regulated-utility rate-base-growth dividend

How They Make Money

$2.1B annual revenue · their business grew +9.0% last year

Residential electric

$0.55B

Commercial electric

$0.59B

Industrial electric

$0.34B

Other electric

$0.63B

The Products That Matter

Regulated electric utility operations

regulated electric utilities

$2.1B · all reported revenue

it's the whole business. TXNM reported $2.1B of annual revenue, and the case for the stock lives or dies on what regulators allow this utility base to earn.

core business

Shareholder payout

dividend

2.9% yield

the dividend pays you while you wait, but 2.9% is not a giant cushion when the stock already trades at 29.5x trailing earnings.

income support

Growth expectation

rate-base expansion case

$3B fy2028 rev est

the street sees revenue reaching $3B by fy2028 from $2.1B today. That's the future doing most of the work in the valuation.

future growth

Key Numbers

$2.20

fy2026 eps est

$3B

fy2028 rev est

29.5x

trailing p/e

2.9%

dividend yield

Financial Health

B++

Strength

balance sheet grade B++ — above average financial health
risk rank 2 — safer than 80% of stocks
price stability 100 / 100
long-term debt $4.7B (42% of capital)
return on equity 8% — $0.08 profit for every $1 investors have put in

B++ — risk rank looks solid but long-term debt needs watching.

Total Return vs. Market

You invested $10000 in TXNM 3 years ago → it's now worth $13340.

The index would have given you $14770.

same period. same starting point. TXNM trailed the market by $1,430.

source: institutional data · total return

What Just Happened

read the period

Q3 2025 GAAP diluted EPS ~$1.22 (ongoing ~$1.33); electric operating revenues ~$647M (~+14% YoY vs. ~$569M prior-year quarter).

Nine-month 2025 electric operating revenues were ~$1.63B vs. ~$1.49B in the prior-year period— normal utility pacing, not triple-digit quarterly revenue growth. Label quarterly vs. nine-month vs. annual before you compare YoY %.

~$647M

Q3 2025 electric rev.

~$1.22

GAAP EPS (Q3)

~$1.33

ongoing EPS (Q3)

the number that mattered

For a regulated utility, the read is rate outcomes + financing around the Blackstone deal— not a mis-scaled “surprise” built from the wrong period label.

Texas-new mexico power company (tnmp), the texas utility subsidiary of txnm energy, together with blackstone infrastructure, reached a settlement with parties in its filed application with the public utility commission of texas (puct) for blackstone to acquire the outstanding stock of txnm energy.

under the terms of the deal announced on may 19th, 2025, txnm energy holders are to receive $61.25 in cash per share upon closing, reflecting a total enterprise value of $11.5 billion. terms of the recent settlement include tnmp providing a $45.5 million rate credit to customers, to be distributed over 48 months following closing, which we anticipate during the second half. parties to the settlement included puct staff, the office of public utility counsel, texas industrial energy consumers, cities served by tnmp, and the texas energy association for marketers.
Txnm’s board of directors has increased the company’s annual dividend payment by $0.06, representing a 3.7% increase.
The resulting regular quarterly dividend of $0.4225 per share will be payable on february 13th to shareholders of record on january 30th.
Historically, txnm has targeted a dividend payout ratio of 50% to 60% of ongoing earnings, although it appears likely that this percentage may have registered higher in 2025.

tnmp and the public service company of new mexico (pnm) will retain their respective headquarters in texas and new mexico.
Following closing of the acquisition, customer rates will continue to be set by state regulators.

blackstone stands to provide significant long-term infrastructure investment that will support economic development throughout the duration of new mexico’s transition to clean energy, while also driving further capital investment and growth into texas.

source: TXNM Energy Q3 2025 earnings materials (investor site / quarterly PDF)

What Could Go Wrong

The top risk here is multiple compression on a utility already trading at 29.5x earnings. The business looks steady. The stock already knows that.

∘

Med

The stock is priced like stability deserves a premium

A 29.5x trailing p/e and a 2.9% dividend yield leave little margin for disappointment. Utilities usually earn their keep through predictability, not explosive upside.

If the market decides TXNM should trade closer to a more ordinary utility multiple, you can lose on valuation even if operations stay fine.

∘

Med

$4.7B of debt limits flexibility

Long-term debt equals 42% of capital. That is manageable for a regulated utility, but it also means execution matters when returns are only 3.5% on capital and 8% on equity.

If financing costs rise or regulators are less generous than expected, modest operating returns leave less room to absorb it.

∘

Med

The valuation needs future growth to show up

Revenue is $2.1B today. The long-range estimate is $3B by fy2028. That gap is the growth case in one line.

If revenue stalls well short of that path, the current $62 midpoint target does not leave much upside to compensate you for waiting.

The business is steady, but 42% debt compared with total funding and a 29.5x earnings price leave little room for mistakes.

Source: institutional data · regulatory filings · risk analysis

Pay Attention To

Earnings

Next earnings report

The number that matters is whether fy2026 EPS still points to $2.20 or better. This stock does not have room for estimate slippage.

Valuation

29.5x earnings versus 3.5% return on capital

That contrast is the whole setup. If returns do not improve, the multiple starts to look generous instead of justified.

Debt

$4.7B long-term debt at 42% of capital

Utilities borrow to build. The catch is that leverage works only if the regulated return keeps pace.

Growth path

The road from $2.1B to $3B of revenue

That is the longer-term promise built into the story. If the growth path slips, the stock starts looking fully valued in a hurry.

Analyst Rankings

earnings predictability

95 / 100

management tends to deliver what the street expects. in human-speak, this is a utility whose numbers usually behave.

risk rank

2

Risk rank measures balance-sheet and business stability. A 2 puts TXNM in the safer part of the market.

price stability

100 / 100

The share price has been unusually steady. Good for sleep. Less exciting if you are hunting for dramatic upside.

Source: institutional data

Institutional Activity

institutions have been net buying for 3 consecutive quarters — 194 buyers vs. 138 sellers in 3q2025. total institutional holdings: 0.1B shares. net buying for 3 quarters.

source: institutional data · 1q2025-3q2025

Source: institutional data

Price Targets

3-5 year target range

$50 $74

$59 Current price

$62 Target midpoint · +5% from current · 3-5yr high: $65 (+10% · 5% ann'l return)

source: institutional data · analyst targets

The Deep Dive

TXNM

XVARY Deep Dive

txnm

The full analysis is in the works.

What you'll get

DCF valuation model

Bull / base / bear scenarios

Competitive moat breakdown

Quarterly earnings tracker

Operating model projections

Risk matrix with kill criteria

Original price target + conviction

Updated with every earnings

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