Analyzing TXNM Energy (NYSE:TXNM) and Spruce Power (NYSE:SPRU)

Spruce Power (NYSE:SPRU) and TXNM Energy (NYSE:TXNM) are both computer and technology companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, earnings, dividends, institutional ownership, analyst recommendations, risk and profitability.

Valuation & Earnings

This table compares Spruce Power and TXNM Energy”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Spruce Power	$77.58 million	0.70	-$65.83 million	($5.06)	-0.58
TXNM Energy	$1.91 billion	2.27	$88.35 million	$1.92	24.96

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

Institutional & Insider Ownership

20.8% of Spruce Power shares are held by institutional investors. Comparatively, 91.7% of TXNM Energy shares are held by institutional investors. 9.6% of Spruce Power shares are held by insiders. Comparatively, 1.4% of TXNM Energy shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and target prices for Spruce Power and TXNM Energy, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Spruce Power	0	0	0	0	0.00
TXNM Energy	0	2	3	0	2.60

TXNM Energy has a consensus target price of $52.00, suggesting a potential upside of 8.49%. Given TXNM Energy’s stronger consensus rating and higher possible upside, analysts clearly believe TXNM Energy is more favorable than Spruce Power.

Volatility and Risk

Spruce Power has a beta of 1.2, suggesting that its share price is 20% more volatile than the S&P 500. Comparatively, TXNM Energy has a beta of 0.4, suggesting that its share price is 60% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Spruce Power	-121.98%	-23.98%	-5.48%
TXNM Energy	9.26%	9.69%	2.26%

Summary

TXNM Energy beats Spruce Power on 12 of the 14 factors compared between the two stocks.

About Spruce Power

Spruce Power Holding Corporation owns and operates distributed solar energy assets in the United States. The company provides subscription-based services for homeowners and businesses to own and maintain rooftop solar and battery storage. It offers its subscription-based services to approximately 75,000 customers. The company is headquartered in Denver, Colorado.

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.