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Reasons to Add Vistra (VST) to Your Portfolio Right Now
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Vistra Corp. (VST - Free Report) is poised to grow on the back of its long-term capital investment plans, stable dividend payments and strong financial position.
Let’s focus on the factors that make this Zacks Rank #2 (Buy) stock a strong investment pick at the moment.
Growth Projections
The Zacks Consensus Estimate for VST’s 2023 earnings per share (“EPS”) is pegged at $3.79, a 7.1% improvement in the last 60 days.
The Zacks Consensus Estimate for 2023 sales is pegged at $20.14 billion, indicating a year-over-year increase of 46.7%.
Dividend & Share Repurchase
The electricity and power generation company has been consistently paying dividends to its shareholders. It declared a quarterly dividend of 21.3 cents per share for fourth-quarter 2023, which is 10% up from the previous year’s quarter.
Currently, the annual payout is 85.2 cents per share. Vistra is targeting $300 million in dividends annually. Its current dividend yield is 2.3%, better than the Zacks S&P 500 Composite's average of 1.65%.
The management also increased its shareholders’ value by making systematic buyback of shares. From November 2021 through Nov 2, 2023, Vistra bought back shares worth $3.26 billion or 26% of its outstanding shares since the buyback program was announced. The lower shares outstanding will have a positive impact on its bottom line.
Return on Equity
Return on Equity (“ROE”) indicates how efficiently a company utilizes shareholders’ funds to generate returns. At present, Vistra’s ROE is 17.8%, higher than the industry average of 10.6%. This indicates that the company is utilizing its funds better than its peers in the industry.
Liquidity
Vistra has a current ratio of 1.22, better than the industry’s average of 0.93. This implies that the company has sufficient financial capability to meet its short-term debt obligations.
Investments & Energy Transition
VST has been making systematic capital expenditures to boost its portfolio. It plans to invest $1.64 billion in 2023 and $1.69 billion in 2024 to further strengthen its operations.’
The company is aiming to achieve net-zero emissions by 2050. Vistra is working to reduce emissions and its development activities are nearing completion. Construction on the three largest combined solar and energy storage projects, part of the Illinois Coal to Solar Initiative, is expected to begin next year.
Vistra’s decision to acquire Energy Harbor will further expand its clean energy generation portfolio and further boost the company’s vision of cutting emissions from electricity generation.
Price Performance
Last year, VST shares rose 58.3% against the industry’s decline of 12.3%.
ALLETE, Alliant Energy and NextEra Energy’s long-term (three- to five-year) earnings growth rates are pinned at 8.1%, 6.3% and 8.2%, respectively.
ALLETE, Alliant Energy and NextEra Energy’s Zacks Consensus Estimate for 2023 earnings reflects year-over-year growth of 28.4%, 2.5% and 7.6%, respectively.
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Reasons to Add Vistra (VST) to Your Portfolio Right Now
Vistra Corp. (VST - Free Report) is poised to grow on the back of its long-term capital investment plans, stable dividend payments and strong financial position.
Let’s focus on the factors that make this Zacks Rank #2 (Buy) stock a strong investment pick at the moment.
Growth Projections
The Zacks Consensus Estimate for VST’s 2023 earnings per share (“EPS”) is pegged at $3.79, a 7.1% improvement in the last 60 days.
The Zacks Consensus Estimate for 2023 sales is pegged at $20.14 billion, indicating a year-over-year increase of 46.7%.
Dividend & Share Repurchase
The electricity and power generation company has been consistently paying dividends to its shareholders. It declared a quarterly dividend of 21.3 cents per share for fourth-quarter 2023, which is 10% up from the previous year’s quarter.
Currently, the annual payout is 85.2 cents per share. Vistra is targeting $300 million in dividends annually. Its current dividend yield is 2.3%, better than the Zacks S&P 500 Composite's average of 1.65%.
The management also increased its shareholders’ value by making systematic buyback of shares. From November 2021 through Nov 2, 2023, Vistra bought back shares worth $3.26 billion or 26% of its outstanding shares since the buyback program was announced. The lower shares outstanding will have a positive impact on its bottom line.
Return on Equity
Return on Equity (“ROE”) indicates how efficiently a company utilizes shareholders’ funds to generate returns. At present, Vistra’s ROE is 17.8%, higher than the industry average of 10.6%. This indicates that the company is utilizing its funds better than its peers in the industry.
Liquidity
Vistra has a current ratio of 1.22, better than the industry’s average of 0.93. This implies that the company has sufficient financial capability to meet its short-term debt obligations.
Investments & Energy Transition
VST has been making systematic capital expenditures to boost its portfolio. It plans to invest $1.64 billion in 2023 and $1.69 billion in 2024 to further strengthen its operations.’
The company is aiming to achieve net-zero emissions by 2050. Vistra is working to reduce emissions and its development activities are nearing completion. Construction on the three largest combined solar and energy storage projects, part of the Illinois Coal to Solar Initiative, is expected to begin next year.
Vistra’s decision to acquire Energy Harbor will further expand its clean energy generation portfolio and further boost the company’s vision of cutting emissions from electricity generation.
Price Performance
Last year, VST shares rose 58.3% against the industry’s decline of 12.3%.
Image Source: Zacks Investment Research
Other Stocks to Consider
Some other top-ranked stocks in the same industry are ALLETE (ALE - Free Report) , Alliant Energy (LNT - Free Report) and NextEra Energy (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.
ALLETE, Alliant Energy and NextEra Energy’s long-term (three- to five-year) earnings growth rates are pinned at 8.1%, 6.3% and 8.2%, respectively.
ALLETE, Alliant Energy and NextEra Energy’s Zacks Consensus Estimate for 2023 earnings reflects year-over-year growth of 28.4%, 2.5% and 7.6%, respectively.