Head-To-Head Review: TXNM Energy (NYSE:TXNM) & Texas Pacific Land (NYSE:TPL)

TXNM Energy (NYSE:TXNM) and Texas Pacific Land (NYSE:TPL) are both energy companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, profitability, institutional ownership, dividends, earnings, valuation and risk.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TXNM Energy	$1.97 billion	3.26	$242.68 million	$1.71	34.48
Texas Pacific Land	$705.82 million	30.29	$453.96 million	$6.90	44.95

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

Volatility and Risk

TXNM Energy has a beta of 0.17, meaning that its share price is 83% less volatile than the S&P 500. Comparatively, Texas Pacific Land has a beta of 0.92, meaning that its share price is 8% less volatile than the S&P 500.

Dividends

TXNM Energy pays an annual dividend of $1.63 per share and has a dividend yield of 2.8%. Texas Pacific Land pays an annual dividend of $2.13 per share and has a dividend yield of 0.7%. TXNM Energy pays out 95.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Texas Pacific Land pays out 30.9% of its earnings in the form of a dividend. Texas Pacific Land has increased its dividend for 3 consecutive years.

Institutional and Insider Ownership

91.7% of TXNM Energy shares are held by institutional investors. Comparatively, 59.9% of Texas Pacific Land shares are held by institutional investors. 1.4% of TXNM Energy shares are held by insiders. Comparatively, 6.9% of Texas Pacific Land shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

This table compares TXNM Energy and Texas Pacific Land’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
TXNM Energy	8.67%	7.20%	1.84%
Texas Pacific Land	61.68%	38.15%	34.45%

Analyst Recommendations

This is a breakdown of current recommendations and price targets for TXNM Energy and Texas Pacific Land, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TXNM Energy	0	6	2	0	2.25
Texas Pacific Land	1	2	1	0	2.00

TXNM Energy currently has a consensus price target of $58.42, indicating a potential downside of 0.91%. Texas Pacific Land has a consensus price target of $350.00, indicating a potential upside of 12.85%. Given Texas Pacific Land’s higher possible upside, analysts plainly believe Texas Pacific Land is more favorable than TXNM Energy.

Summary

Texas Pacific Land beats TXNM Energy on 12 of the 17 factors compared between the two stocks.

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.

About Texas Pacific Land

Texas Pacific Land Corporation engages in the land and resource management, and water services and operations businesses. The company owns a 1/128th nonparticipating perpetual oil and gas royalty interest (NPRI) under approximately 85,000 acres of land; a 1/16th NPRI under approximately 371,000 acres of land; and approximately 4,000 additional net royalty acres, total of approximately 195,000 NRA located in the western part of Texas. The Land and Resource Management segment manages surface acres of land, and oil and gas royalty interest in West Texas. This segment also engages in easements, such as transporting oil, gas and related hydrocarbons, power line and utility, and subsurface wellbore easements. In addition, this segment leases its land for processing, storage, and compression facilities and roads; and is involved in sale of materials, such as caliche, sand, and other material, as well as sells land. The Water Services and Operations segment provides full-service water offerings, including water sourcing, produced-water treatment, infrastructure development, and disposal solutions to operators in the Permian Basin. This segment also holds produced water royalties. Texas Pacific Land Corporation was founded in 1888 and is headquartered in Dallas, Texas.