PNM Resources (NYSE:PNM) uses coal, nuclear, natural gas, solar and wind energy to generate electricity for roughly 730,000 customers in New Mexico and Texas. Thanks to one of the hottest starts to summer on record and regional growth, both the short-term and the long-term fundamentals look solid for this electric company.
Founded in 1917 and headquartered in Albuquerque, PNM actually could benefit more from its operations in its neighbor to the east. The company is the fourth-largest retail electricity provider in Texas, even after it exited part of its business in that state because of volatile and uncertain energy prices.
Now, changes at the state regulatory level could make the competitive electricity business worth while once again.
Texas is the biggest consumer of electricity in the U.S. and it’s facing a serious shortage of juice. A scorching-hot start to summer has the state talking about tripling the maximum prices utilities can charge to curb demand — and create an incentive to build new power plants. That could be a boon to the industry.
PNM, which employs nearly 2,000 people, saw its stock rise a respectable 7% for the first half of 2012. Throw in the healthy 3% yield on the dividend, and you’ve got a steady supply of income and price appreciation fueling your portfolio.
Check out the complete list of Real America Index components, along with an interactive map of short-term and long-term returns.
As of this writing, Dan Burrows did not hold a position in any of the aforementioned securities.