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VST vs. PEG: Which Utility Stock Can Provide Better Return Long-Term?
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Key Takeaways
PEG is currently trading at a forward 12-month price to earnings of 19.57X, while VST is trading at 25.45X.
PEG offers a 3.04% dividend yield, far above VST's 0.46% and stronger than the S&P 500 yield.
PEG's debt-to-capital currently stands at 56.48% compared with Vistra's 77.47%
The companies belonging to the Zacks Utility-Electric Power industry offer an appealing investment case, supported by stable cash flows and predictable earnings from regulated business models. Many U.S.-based utilities operate under long-term power purchase agreements, which help shield them from broader economic fluctuations. Rapidly rising electricity demand, driven by artificial intelligence data centers, the rising adoption of electric vehicles, and the reshoring of certain manufacturing activities, is opening new avenues for growth. Ongoing capital expenditures in advanced technologies and infrastructure upgrades are further enhancing efficiency, enabling utilities to deliver consistent earnings and sustain dependable dividend distributions.
At the same time, the industry is experiencing a major shift amid the global drive toward decarbonization. Utilities are increasingly channeling investments into renewable energy projects, including solar, wind, battery storage and grid modernization. Companies that embrace these low-carbon technologies early stand to gain from expanding markets, reduced exposure to fuel price volatility, and heightened investor interest across both institutional and retail segments.
Amid such a backdrop, let’s focus on two utilities, Vistra Corp. (VST - Free Report) and Public Service Enterprise Group Inc. (PEG - Free Report) , both of which are leveraging their nuclear power plants to produce a baseload of clean energy for their customers.
Public Service Enterprise Group offers a strong investment case, supported by its regulated utility operations and a robust portfolio of carbon-free nuclear assets. Its subsidiary, Public Service Electric and Gas, ensures steady revenue through electric and gas distribution, enhanced by grid modernization and resiliency projects. PEG’s nuclear fleet provides a strategic edge, supplying reliable, cost-efficient, and emissions-free power that aligns with clean energy targets and growing demand from electrification. Coupled with prudent financial management, a dependable dividend profile, and a clear focus on sustainability, PSEG is well-positioned to deliver long-term growth while remaining a stable option for conservative investors.
Vistra presents a compelling investment opportunity, supported by its diversified generation portfolio and strong cash flow visibility. As one of the largest competitive power producers in the United States, the company operates a balanced mix of natural gas, nuclear, solar and battery storage assets. Its nuclear facilities serve as a cornerstone of reliable, carbon-free baseload generation, providing stability amid market volatility and aligning with long-term decarbonization goals. This nuclear strength, combined with cost-efficient thermal assets and expanding investments in renewable energy and storage, enhances Vistra’s operational flexibility and ESG positioning. Backed by disciplined capital allocation and solid free cash flow, the company is well-positioned to deliver sustainable growth and consistent shareholder value.
Both utilities are prominent operators in the utility sector; a side-by-side evaluation will highlight which stock offers superior investment prospects and stronger long-term value for investors.
VST & PEG’s Earnings Growth Projections
The Zacks Consensus Estimate for Vistra’s earnings per share in 2025 decreased by 2.33% and increased by 4.64% for 2026, in the past 60 days. Long-term (three to five years) earnings growth per share is pegged at 13.78%.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Public Service Enterprise Group’s earnings per share in 2025 and 2026 increased 0.25% and 0.46%, respectively, in the past 60 days. Long-term (three to five years) earnings growth per share is pegged at 7.16%.
Image Source: Zacks Investment Research
PEG & VST’s Dividend Yield
Dividends are regular payments made by a company to its shareholders and represent a direct way for investors to earn a return on their investment. They are an important indicator of a company’s financial health and stability, often signaling strong cash flow and consistent earnings. Utilities are known for regular dividend payments to their shareholders.
Currently, the dividend yield for Public Service Enterprise Group is 3.04%, while the same for Vistra is 0.46%. PEG’s dividend yield is better than the S&P 500 yield of 1.49%.
Debt to Capital
The Zacks Utilities sector is a capital-intensive one, and huge investments are required at regular intervals to upgrade, maintain and expand operations. The usage of new evolving technology also requires investments. Therefore, utilities borrow from the market and add it to their internal cash generation to fund their long-term investments.
PEG’s debt-to-capital currently stands at 56.48% compared with Vistra’s debt-to-capital of 77.47%. Both companies are using higher debt to fund their business, as the industry’s debt-to-capital stands at 54.83%.
Return on Equity (ROE)
ROE is an essential financial indicator that evaluates a company’s efficiency in generating profits from the equity invested by its shareholders. It demonstrates how well management is utilizing the capital provided to increase earnings and deliver value.
VST’s current ROE is 108.41% compared with PEG’s ROE of 12.08%, while the industry’s ROE is pegged at 10.14%.
Valuation
Public Service Enterprise Group currently appears to be trading at a discount compared with Vistra on a Price/Earnings Forward 12-month basis. (P/E- F12M).
PEG is currently trading at 19.57X, while VST is trading at 25.45X compared with the industry’s 14.92X.
Price Performance
Public Service Enterprise Group’s shares have gained 6% in the past three-month period compared with Vistra’s rally of 22.7% and the industry’s return of 1.7%.
Image Source: Zacks Investment Research
Conclusion
Vistra and Public Service Enterprise Group are strategically investing in their infrastructure to serve customers more efficiently and reliably.
Based on the above discussion, Public Service Enterprise Group is currently in a better position compared with Vistra, despite the stocks carrying a Zacks Rank #3 (Hold) each. PEG’s better dividend yield, positive movement in earnings estimates, cheaper valuation, and lower percentage of debt usage make it a better choice in the utility space.
Image: Bigstock
VST vs. PEG: Which Utility Stock Can Provide Better Return Long-Term?
Key Takeaways
The companies belonging to the Zacks Utility-Electric Power industry offer an appealing investment case, supported by stable cash flows and predictable earnings from regulated business models. Many U.S.-based utilities operate under long-term power purchase agreements, which help shield them from broader economic fluctuations. Rapidly rising electricity demand, driven by artificial intelligence data centers, the rising adoption of electric vehicles, and the reshoring of certain manufacturing activities, is opening new avenues for growth. Ongoing capital expenditures in advanced technologies and infrastructure upgrades are further enhancing efficiency, enabling utilities to deliver consistent earnings and sustain dependable dividend distributions.
At the same time, the industry is experiencing a major shift amid the global drive toward decarbonization. Utilities are increasingly channeling investments into renewable energy projects, including solar, wind, battery storage and grid modernization. Companies that embrace these low-carbon technologies early stand to gain from expanding markets, reduced exposure to fuel price volatility, and heightened investor interest across both institutional and retail segments.
Amid such a backdrop, let’s focus on two utilities, Vistra Corp. (VST - Free Report) and Public Service Enterprise Group Inc. (PEG - Free Report) , both of which are leveraging their nuclear power plants to produce a baseload of clean energy for their customers.
Public Service Enterprise Group offers a strong investment case, supported by its regulated utility operations and a robust portfolio of carbon-free nuclear assets. Its subsidiary, Public Service Electric and Gas, ensures steady revenue through electric and gas distribution, enhanced by grid modernization and resiliency projects. PEG’s nuclear fleet provides a strategic edge, supplying reliable, cost-efficient, and emissions-free power that aligns with clean energy targets and growing demand from electrification. Coupled with prudent financial management, a dependable dividend profile, and a clear focus on sustainability, PSEG is well-positioned to deliver long-term growth while remaining a stable option for conservative investors.
Vistra presents a compelling investment opportunity, supported by its diversified generation portfolio and strong cash flow visibility. As one of the largest competitive power producers in the United States, the company operates a balanced mix of natural gas, nuclear, solar and battery storage assets. Its nuclear facilities serve as a cornerstone of reliable, carbon-free baseload generation, providing stability amid market volatility and aligning with long-term decarbonization goals. This nuclear strength, combined with cost-efficient thermal assets and expanding investments in renewable energy and storage, enhances Vistra’s operational flexibility and ESG positioning. Backed by disciplined capital allocation and solid free cash flow, the company is well-positioned to deliver sustainable growth and consistent shareholder value.
Both utilities are prominent operators in the utility sector; a side-by-side evaluation will highlight which stock offers superior investment prospects and stronger long-term value for investors.
VST & PEG’s Earnings Growth Projections
The Zacks Consensus Estimate for Vistra’s earnings per share in 2025 decreased by 2.33% and increased by 4.64% for 2026, in the past 60 days. Long-term (three to five years) earnings growth per share is pegged at 13.78%.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Public Service Enterprise Group’s earnings per share in 2025 and 2026 increased 0.25% and 0.46%, respectively, in the past 60 days. Long-term (three to five years) earnings growth per share is pegged at 7.16%.
Image Source: Zacks Investment Research
PEG & VST’s Dividend Yield
Dividends are regular payments made by a company to its shareholders and represent a direct way for investors to earn a return on their investment. They are an important indicator of a company’s financial health and stability, often signaling strong cash flow and consistent earnings. Utilities are known for regular dividend payments to their shareholders.
Currently, the dividend yield for Public Service Enterprise Group is 3.04%, while the same for Vistra is 0.46%. PEG’s dividend yield is better than the S&P 500 yield of 1.49%.
Debt to Capital
The Zacks Utilities sector is a capital-intensive one, and huge investments are required at regular intervals to upgrade, maintain and expand operations. The usage of new evolving technology also requires investments. Therefore, utilities borrow from the market and add it to their internal cash generation to fund their long-term investments.
PEG’s debt-to-capital currently stands at 56.48% compared with Vistra’s debt-to-capital of 77.47%. Both companies are using higher debt to fund their business, as the industry’s debt-to-capital stands at 54.83%.
Return on Equity (ROE)
ROE is an essential financial indicator that evaluates a company’s efficiency in generating profits from the equity invested by its shareholders. It demonstrates how well management is utilizing the capital provided to increase earnings and deliver value.
VST’s current ROE is 108.41% compared with PEG’s ROE of 12.08%, while the industry’s ROE is pegged at 10.14%.
Valuation
Public Service Enterprise Group currently appears to be trading at a discount compared with Vistra on a Price/Earnings Forward 12-month basis. (P/E- F12M).
PEG is currently trading at 19.57X, while VST is trading at 25.45X compared with the industry’s 14.92X.
Price Performance
Public Service Enterprise Group’s shares have gained 6% in the past three-month period compared with Vistra’s rally of 22.7% and the industry’s return of 1.7%.
Image Source: Zacks Investment Research
Conclusion
Vistra and Public Service Enterprise Group are strategically investing in their infrastructure to serve customers more efficiently and reliably.
Based on the above discussion, Public Service Enterprise Group is currently in a better position compared with Vistra, despite the stocks carrying a Zacks Rank #3 (Hold) each. PEG’s better dividend yield, positive movement in earnings estimates, cheaper valuation, and lower percentage of debt usage make it a better choice in the utility space.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.