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Here's Why You Should Add Vistra (VST) to Your Portfolio Now
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Vistra Corp.’s (VST - Free Report) systematic capital investment plans, expansion of the customer base and share repurchase program will further drive its performance. Given its growth opportunities and dividend growth, VST makes for a solid investment option in the utility sector.
Let’s focus on the factors that make this Zacks Rank #2 (Buy) company a strong investment pick at the moment.
Growth Projections
The Zacks Consensus Estimate for VST’s 2023 earnings per share (EPS) has increased 0.4% to $2.76 in the past 60 days. This indicates a year-over-year bottom-line improvement of 193.9%.
The consensus mark for revenues is pegged at $16.24 billion, indicating a year-over-year increase of 18.3%.
Return on Equity (ROE)
ROE indicates how efficiently a company has been utilizing its funds to generate higher returns. Currently, Vistra’s ROE is 30.4%, much higher than the industry’s average of 4.91%. This indicates that the company has been utilizing its funds more constructively than its peers in the electric power utility industry.
Dividend History
Vistra has been consistently increasing shareholders’ value by paying dividends. In the past five-year period, the company has increased its dividend seven times. Currently, its quarterly dividend is 20.4 cents per share, which is 3.3% up from previous quarter’s 19.75 cents per share. This resulted in an annualized dividend of 81.6 cents per share. VST’s current dividend yield is 3.12%, better than the Zacks S&P 500 Composite's average of 1.41%.
Share Repurchase Program
In October 2021, Vistra’s board of directors authorized a share repurchase program worth $2 billion. The board sanctioned incremental amounts of $1.25 billion and $1 billion in August 2022 and March 2023, respectively, for share repurchases. This brought the total authorized amount under the share repurchase program to $4.25 billion. The company executed $2.7 billion through May 4, 2023, and the remaining $1.55 billion is expected to be spent by the end of 2024.
Investments & Emission Reduction
Vistra has been making systematic capital expenditures to boost its portfolio. It plans to invest $2,024 million in 2023 to further strengthen its operations.
The company is aiming for net-zero emissions by 2050. It currently has 3,400 megawatts (MW) of zero-carbon generation online. It has 10,400 MW fossil generation retired since 2018 and expects to reach 20,000 MW by 2027 (from the 2010 baseline).
Price Performance
In the past six months, VST’s shares have rallied 22.2% against the industry’s average decline of 1.7%.
FirstEnergy’s long-term earnings growth rate is 6.45%. The Zacks Consensus Estimate for the company’s 2023 EPS is pinned at $2.51, implying a year-over-year increase of 4.2%.
Alliant Energy’s long-term earnings growth rate is 6.47%. The consensus estimate for the company’s 2023 EPS is pegged at $2.88, indicating a year-over-year improvement of 2.9%.
NextEra Energy’s long-term earnings growth rate is 8.38%. The consensus mark for the company’s 2023 EPS is pinned at $3.11, indicating year-over-year growth of 7.2%.
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Here's Why You Should Add Vistra (VST) to Your Portfolio Now
Vistra Corp.’s (VST - Free Report) systematic capital investment plans, expansion of the customer base and share repurchase program will further drive its performance. Given its growth opportunities and dividend growth, VST makes for a solid investment option in the utility sector.
Let’s focus on the factors that make this Zacks Rank #2 (Buy) company a strong investment pick at the moment.
Growth Projections
The Zacks Consensus Estimate for VST’s 2023 earnings per share (EPS) has increased 0.4% to $2.76 in the past 60 days. This indicates a year-over-year bottom-line improvement of 193.9%.
The consensus mark for revenues is pegged at $16.24 billion, indicating a year-over-year increase of 18.3%.
Return on Equity (ROE)
ROE indicates how efficiently a company has been utilizing its funds to generate higher returns. Currently, Vistra’s ROE is 30.4%, much higher than the industry’s average of 4.91%. This indicates that the company has been utilizing its funds more constructively than its peers in the electric power utility industry.
Dividend History
Vistra has been consistently increasing shareholders’ value by paying dividends. In the past five-year period, the company has increased its dividend seven times. Currently, its quarterly dividend is 20.4 cents per share, which is 3.3% up from previous quarter’s 19.75 cents per share. This resulted in an annualized dividend of 81.6 cents per share. VST’s current dividend yield is 3.12%, better than the Zacks S&P 500 Composite's average of 1.41%.
Share Repurchase Program
In October 2021, Vistra’s board of directors authorized a share repurchase program worth $2 billion. The board sanctioned incremental amounts of $1.25 billion and $1 billion in August 2022 and March 2023, respectively, for share repurchases. This brought the total authorized amount under the share repurchase program to $4.25 billion. The company executed $2.7 billion through May 4, 2023, and the remaining $1.55 billion is expected to be spent by the end of 2024.
Investments & Emission Reduction
Vistra has been making systematic capital expenditures to boost its portfolio. It plans to invest $2,024 million in 2023 to further strengthen its operations.
The company is aiming for net-zero emissions by 2050. It currently has 3,400 megawatts (MW) of zero-carbon generation online. It has 10,400 MW fossil generation retired since 2018 and expects to reach 20,000 MW by 2027 (from the 2010 baseline).
Price Performance
In the past six months, VST’s shares have rallied 22.2% against the industry’s average decline of 1.7%.
Image Source: Zacks Investment Research
Other Stocks to Consider
A few other top-ranked stocks from the same industry are FirstEnergy Corp. (FE - Free Report) , Alliant Energy (LNT - Free Report) and NextEra Energy, Inc. (NEE - Free Report) , each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
FirstEnergy’s long-term earnings growth rate is 6.45%. The Zacks Consensus Estimate for the company’s 2023 EPS is pinned at $2.51, implying a year-over-year increase of 4.2%.
Alliant Energy’s long-term earnings growth rate is 6.47%. The consensus estimate for the company’s 2023 EPS is pegged at $2.88, indicating a year-over-year improvement of 2.9%.
NextEra Energy’s long-term earnings growth rate is 8.38%. The consensus mark for the company’s 2023 EPS is pinned at $3.11, indicating year-over-year growth of 7.2%.