PNM Resources (PNM) Revises 2019 View And Hikes Dividend
Zacks Investment Research | Dec 18, 2019 09:33PM ET
PNM Resources, Inc. (NYSE:PNM) revised its 2019 guidance upwards and issued guidance for 2020. The board of directors announced a 6% hike in annual dividend rate increasing it to $1.23 per share from $1.16. The company intends to distribute 50-60% of annual ongoing earnings as dividends. The current annualized dividend yield of the company is 2.38% higher than the Zacks S&P 500 composite’s 1.8%.
Details of Guidance Hike
PNM Resources raised consolidated ongoing earnings guidance for 2019 in the range of $2.13-$2.16 from $2.05-$2.11. PNM Resources announced earnings guidance for 2020 in the range of $2.16-$2.26.
The mid-point of the revised 2019 earnings guidance is $2.14, which is higher than the Zacks Consensus Estimate of $2.10. The mid-point of the 2020 earnings guidance is $2.21, in line with Zacks Consensus Estimate.
Can PNM Resources Sustain Dividend Hikes?
The company is paying dividend on a consistent basis. The latest dividend hike is the 10th consecutive increase since 2012. The consistent hike in dividend reflects on the company’s strong performance.
The company continues to invest substantially in its utility assets to provide reliable services to its customers. From 2016 to 2018, PNM and TNMP collectively invested $1,501.7 million in a utility plant that includes substations, power plants, nuclear fuel as well as transmission and distribution systems.
The company plans to invest $3.9 billion from 2019 to 2023 and expects rate-based compound annual growth of 9.6% over the same period. The planned expenditure is $300 million higher than the previous plan, owing to investment in system reliability projects at TNMP. We believe that ongoing investments will strengthen infrastructure and rate hikes will boost the financial position of the company. This will enable it to hike dividend consistently.
Utilities are Rewarding Shareholders
Dividend payment and hikes are very common for companies operating in the Original post
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