Head to Head Comparison: TXNM Energy (NYSE:TXNM) and Otter Tail (NASDAQ:OTTR)

TXNM Energy (NYSE:TXNM) and Otter Tail (NASDAQ:OTTR) are both mid-cap oils/energy companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, profitability, valuation, analyst recommendations, dividends, earnings and risk.

Insider and Institutional Ownership

91.7% of TXNM Energy shares are owned by institutional investors. Comparatively, 61.3% of Otter Tail shares are owned by institutional investors. 1.4% of TXNM Energy shares are owned by insiders. Comparatively, 2.3% of Otter Tail shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Dividends

TXNM Energy pays an annual dividend of $1.63 per share and has a dividend yield of 3.4%. Otter Tail pays an annual dividend of $1.87 per share and has a dividend yield of 2.5%. TXNM Energy pays out 84.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Otter Tail pays out 25.8% of its earnings in the form of a dividend. Otter Tail has increased its dividend for 11 consecutive years.

Earnings & Valuation

This table compares TXNM Energy and Otter Tail”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TXNM Energy	$1.91 billion	2.28	$88.35 million	$1.92	25.12
Otter Tail	$1.34 billion	2.32	$294.19 million	$7.24	10.29

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

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for TXNM Energy and Otter Tail, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TXNM Energy	0	2	3	0	2.60
Otter Tail	0	1	0	0	2.00

TXNM Energy presently has a consensus price target of $52.00, suggesting a potential upside of 7.82%. Given TXNM Energy’s stronger consensus rating and higher possible upside, equities analysts clearly believe TXNM Energy is more favorable than Otter Tail.

Profitability

This table compares TXNM Energy and Otter Tail’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
TXNM Energy	9.26%	9.69%	2.26%
Otter Tail	22.70%	19.84%	8.96%

Volatility & Risk

TXNM Energy has a beta of 0.4, indicating that its share price is 60% less volatile than the S&P 500. Comparatively, Otter Tail has a beta of 0.54, indicating that its share price is 46% less volatile than the S&P 500.

Summary

Otter Tail beats TXNM Energy on 10 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 Otter Tail

Otter Tail Corporation, together with its subsidiaries, engages in electric utility, manufacturing, and plastic pipe businesses in the United States. It operates through three segments: Electric, Manufacturing, and Plastics. The Electric segment produces, transmits, distributes, and sells electric energy in Minnesota, North Dakota, and South Dakota; and operates as a participant in the Midcontinent Independent System Operator markets. This segment generates electricity through coal, fuel oil, solar, wind, and natural gas. It serves approximately residential, commercial, and industrial customers. The Manufacturing segment engages in the contract machining, metal parts stamping, fabrication and painting, production of plastic thermoformed horticultural containers, life science and industrial packaging, and material handling components and extruded raw material stock for the recreational vehicle, lawn and garden, agricultural, construction, and industrial and energy equipment end markets. The Plastics segment manufactures polyvinyl chloride pipes for municipal water, rural water, wastewater, storm drainage and water reclamation system, and other uses for customers in the horticulture, medical and life sciences, industrial, recreation, and electronics industries. This segment markets its products to wholesalers and distributors through independent sales representatives, company salespersons, and customer service representatives. The company was formerly known as Otter Tail Power Company and changed its name to Otter Tail Corporation in 2001. Otter Tail Corporation was founded in 1907 and is headquartered in Fergus Falls, Minnesota.