TXNM Energy, Inc. (TXNM)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 65.62% | 53.91% | 49.53% | 55.68% | 61.58% |
| Operating profit margin | 23.01% | 11.93% | 17.50% | 17.31% | 18.73% |
| Pretax margin | 14.22% | 4.67% | 9.39% | 13.73% | 13.65% |
| Net profit margin | 12.31% | 4.56% | 7.56% | 11.03% | 11.38% |
TXNM Energy, Inc.'s profitability ratios have shown fluctuations over the years. The gross profit margin, which indicates the percentage of revenue retained after accounting for the cost of goods sold, decreased from 61.58% in 2020 to 49.53% in 2022 before recovering to 65.62% in 2024.
The operating profit margin, reflecting the company's ability to generate profit from its core operations, remained relatively stable between 17.31% and 18.73% from 2020 to 2021 before dropping to 11.93% in 2023 and rebounding to 23.01% in 2024.
The pretax margin, representing the earnings before taxes relative to total revenue, experienced a decline from 13.65% in 2020 to 9.39% in 2022 and then fell sharply to 4.67% in 2023, before increasing to 14.22% in 2024.
Lastly, the net profit margin, which shows the proportion of revenue that translates into net income, decreased from 11.38% in 2020 to 7.56% in 2022, dropped further to 4.56% in 2023, and then rose to 12.31% in 2024. Overall, while there were fluctuations in profitability ratios, the company managed to improve its profitability by the end of the period.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 4.04% | 2.26% | 4.25% | 3.56% | 3.59% |
| Return on assets (ROA) | 2.16% | 0.86% | 1.84% | 2.27% | 2.18% |
| Return on total capital | 19.95% | 11.90% | 15.49% | 15.77% | 15.78% |
| Return on equity (ROE) | 9.52% | 3.74% | 7.72% | 9.01% | 8.41% |
TXNM Energy, Inc.'s profitability ratios reflect varying levels of performance over the years.
The Operating return on assets (Operating ROA) averaged around 3.76% over the period, showing stability in the company's ability to generate operating profits from its assets, although there was a slight increase in 2022 and a dip in 2023 compared to the surrounding years.
Return on assets (ROA), on the other hand, exhibited a decreasing trend, dropping from 2.18% in 2020 to 0.86% in 2023 before recovering to 2.16% in 2024. This suggests that the company's overall ability to generate profits from its total assets declined in the mid-years but displayed a partial recovery in the latest year.
When looking at Return on total capital, the company's ability to generate returns from both debt and equity capital held relatively steady, averaging about 15.78% over the period. The ratio saw a decline in 2023 but witnessed a significant increase in 2024 to 19.95%, indicating a stronger performance in utilizing total capital in the latest year.
Finally, Return on equity (ROE), which represents the return generated on shareholders' equity, fluctuated with a peak of 9.52% in 2024 and a trough of 3.74% in 2023. The company's ability to maximize returns for its equity holders improved over the years despite the volatility.
Overall, while the company's performance in terms of profitability ratios has been mixed, there are signs of improvement in certain areas by the end of the period. It will be crucial for TXNM Energy, Inc. to continue monitoring and optimizing its profitability ratios to ensure sustainable and long-term growth.