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Vistra Corp. Shares Rise 183% in a Year: Should You Buy?
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Shares of Vistra Corp. (VST - Free Report) have rallied 183% over the past year compared with its industry’s growth of 16.6%. Strong retail business and rising demand from its expanding customer base are boosting its performance.
Vistra’s hedging program saves the company from power price fluctuations and results in more stable earnings.
Vistra’s shares have outperformed its sector and the S&P 500 over the past year.
One-Year Price Performance
Image Source: Zacks Investment Research
Factors Acting as Tailwinds for VST Stock
Vistra enjoys the benefit of increasing demand for clean electricity in its service region. The development of large load data centers and electrification of oil field operations, primarily in the Permian Basin, continue to boost demand for its services. The company also gained from the addition of new residential customers in its service area.
Vistra’s expertise in generating large volumes of clean electricity has earned it the selection of Microsoft Corporation (MSFT - Free Report) and Amazon (AMZN - Free Report) for long-term renewable power purchases. Vistra has started construction on two new solar facilities: a 200 megawatt (“MW”) site backed by AMZN in Texas and a 405 MW site backed by MSFT in Illinois.
As of Aug. 5, 2024, Vistra has hedged nearly 94% of its expected generation volumes for the rest of 2024, around 86% for 2025, and about 55% for 2026. Vistra's comprehensive hedging program and recent forward price curves support its 2024 guidance range.
The generation of clean electricity is an integral part of energy transition and Vistra has been adding clean sources in its generation sources through organic and inorganic means. Vistra has more than 70 sites with land and interconnects for the future development of clean energy projects. The company also received approval from the Nuclear Regulatory Commission to operate its Comanche Peak nuclear plant for an additional 20 years.
VST’s Earnings Estimates Move Up
Vistra’s 2024 and 2025 earnings per share reflect year-over-year growth of 35.4% and 41.1%, respectively. The upward revision in earnings estimates indicates analysts’ increasing confidence in the stock.
VST’s ongoing share repurchase of shares through its share repurchase program is also having a positive impact on its earnings per share.
Image Source: Zacks Investment Research
Vistra’s Capital Return Program
Vistra continues to increase its shareholders' value through its share repurchase program and dividend payments.
Vistra has bought back shares worth over $4.25 billion from November 2021, resulting in a 29% reduction in outstanding shares from November 2021 levels. VST’s management expects to continue with the buyback of shares and aims to repurchase at least $2.25 billion worth of outstanding shares between 2024 and 2025.
VST’s board of directors has also approved a quarterly dividend of 21.95 cents for the third quarter of 2024, reflecting a sequential increase of 1%. Check VST’s dividend history here.
VST’s ROE Higher Than its Industry
VST’s trailing 12-month return on equity is 21.1%, ahead of the industry average of 10.3%. Return on equity, a profitability measure, reflects how effectively a company is utilizing its shareholders’ funds in its operations to generate income.
Image Source: Zacks Investment Research
VST Stock Trades at a Discount
The company is currently trading at a discount compared with its industry on a forward 12-month P/E basis.
Image Source: Zacks Investment Research
Summing Up
Vistra operates in a region where electricity demand is rising due to the development of large data centers and electrification in the Permian Basin region. The company is also expanding its clean energy generation portfolio to meet the rising demand.
Image: Bigstock
Vistra Corp. Shares Rise 183% in a Year: Should You Buy?
Shares of Vistra Corp. (VST - Free Report) have rallied 183% over the past year compared with its industry’s growth of 16.6%. Strong retail business and rising demand from its expanding customer base are boosting its performance.
Vistra’s hedging program saves the company from power price fluctuations and results in more stable earnings.
Vistra’s shares have outperformed its sector and the S&P 500 over the past year.
One-Year Price Performance
Image Source: Zacks Investment Research
Factors Acting as Tailwinds for VST Stock
Vistra enjoys the benefit of increasing demand for clean electricity in its service region. The development of large load data centers and electrification of oil field operations, primarily in the Permian Basin, continue to boost demand for its services. The company also gained from the addition of new residential customers in its service area.
Vistra’s expertise in generating large volumes of clean electricity has earned it the selection of Microsoft Corporation (MSFT - Free Report) and Amazon (AMZN - Free Report) for long-term renewable power purchases. Vistra has started construction on two new solar facilities: a 200 megawatt (“MW”) site backed by AMZN in Texas and a 405 MW site backed by MSFT in Illinois.
As of Aug. 5, 2024, Vistra has hedged nearly 94% of its expected generation volumes for the rest of 2024, around 86% for 2025, and about 55% for 2026. Vistra's comprehensive hedging program and recent forward price curves support its 2024 guidance range.
The generation of clean electricity is an integral part of energy transition and Vistra has been adding clean sources in its generation sources through organic and inorganic means. Vistra has more than 70 sites with land and interconnects for the future development of clean energy projects. The company also received approval from the Nuclear Regulatory Commission to operate its Comanche Peak nuclear plant for an additional 20 years.
VST’s Earnings Estimates Move Up
Vistra’s 2024 and 2025 earnings per share reflect year-over-year growth of 35.4% and 41.1%, respectively. The upward revision in earnings estimates indicates analysts’ increasing confidence in the stock.
VST’s ongoing share repurchase of shares through its share repurchase program is also having a positive impact on its earnings per share.
Image Source: Zacks Investment Research
Vistra’s Capital Return Program
Vistra continues to increase its shareholders' value through its share repurchase program and dividend payments.
Vistra has bought back shares worth over $4.25 billion from November 2021, resulting in a 29% reduction in outstanding shares from November 2021 levels. VST’s management expects to continue with the buyback of shares and aims to repurchase at least $2.25 billion worth of outstanding shares between 2024 and 2025.
VST’s board of directors has also approved a quarterly dividend of 21.95 cents for the third quarter of 2024, reflecting a sequential increase of 1%. Check VST’s dividend history here.
VST’s ROE Higher Than its Industry
VST’s trailing 12-month return on equity is 21.1%, ahead of the industry average of 10.3%. Return on equity, a profitability measure, reflects how effectively a company is utilizing its shareholders’ funds in its operations to generate income.
Image Source: Zacks Investment Research
VST Stock Trades at a Discount
The company is currently trading at a discount compared with its industry on a forward 12-month P/E basis.
Image Source: Zacks Investment Research
Summing Up
Vistra operates in a region where electricity demand is rising due to the development of large data centers and electrification in the Permian Basin region. The company is also expanding its clean energy generation portfolio to meet the rising demand.
It is better to remain invested in this Zacks Rank #3 (Hold) stock and enjoy the benefits of dividends and rising earnings estimates. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.