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Vistra Trading at a Premium to Its Industry: How to Play the Stock?
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Key Takeaways
Vistra trades at 26.39X forward P/E, well above the utility industry's 14.43X and sector's 15.86X.
VST gains from data center load growth, new customers, and a fully integrated power and retail model.
The company repurchased $5.4B shares since 2021 and plans $1.4B more buybacks through 2026.
Vistra Corp. (VST - Free Report) is currently trading at a premium valuation compared to its Zacks Utility Electric Power industry, with its forward 12-month price-to-earnings (P/E) ratio at 26.39X. The industry is currently trading at 14.43X and the broader Zacks Utilities Sector’s 15.86X.
Vistra aims to expand its business by making strategic investments in high-value retail, renewable and energy storage assets, while simultaneously lowering its carbon footprint and building a more sustainable company that delivers lasting value to its stakeholders. High availability rate of its generation assets increases the reliability of its services and allows the company to cater to the rising demand in its service territories efficiently.
Image Source: Zacks Investment Research
Vistra is currently trading at a premium compared with another industry operator, Duke Energy Corporation (DUK - Free Report) , which has a strong nuclear fleet. The current P/E- F12M ratio of DUK is 18.53X.
Backed by strong generation asset availability and consistent demand for its services, the company delivered steady performance, which has been mirrored in its share price. Over the past year, its stock has outpaced its industry rally.
Image Source: Zacks Investment Research
Relying solely on VST’s price gains without considering its premium valuation may not provide a complete picture for investors. A deeper look at the company’s fundamentals, growth drivers and market position is essential to assess whether now is an attractive entry point for adding VST stock to your portfolio.
Positive Forces Acting as Tailwinds for VST Stock
The development of large load data centers and electrification of oil field operations, primarily in the Permian Basin, continues to boost demand for its services. The company also gained from the addition of new residential customers in its service area.
Vistra benefits from a fully integrated model that unites power generation, retail electricity sales, and energy storage with sophisticated commodity risk management. Its robust generation fleet, coupled with a leading retail platform, enables it to capture value across both supply and demand. This setup creates a natural hedge against commodity volatility, improving earnings visibility, stabilizing cash flows and supporting consistent financial performance.
Vistra’s diverse multi-fuel generation portfolio provides a strong foundation for long-term growth. With a balanced mix of natural gas, nuclear, coal, and expanding renewable and battery storage resources, the company is well-positioned to adapt to the shifting U.S. energy landscape. This strategy ensures grid reliability, optimizes generation economics, and enables Vistra to capitalize, particularly during fuel price volatility or extreme weather events. As of Dec. 31, 2024, Vistra’s total generation capacity stood at 40,657 megawatts (“MW”), with natural gas accounting for 59%, coal 21%, nuclear 16% and renewables 4%.
Vistra’s strong hedging strategy significantly improves the visibility of its future earnings. As of Aug. 1, 2025, the company has fully hedged its projected production for the year and covered 95% of its expected output for 2026. This proactive approach enhances financial stability and reduces exposure to market fluctuations.
Earnings Estimates for VST Stock
The Zacks Consensus Estimate for VST’s 2025 earnings per share suggests a year-over-year decline of 10%, while 2026 earnings per share are showing a year-over-year improvement of 32.54%.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Duke Energy’s 2025 and 2026 earnings per share reflects a year-over-year growth of 7.12% and 6.06% respectively.
VST Stock’s ROE Higher Than Its Industry
VST’s trailing 12-month return on equity (ROE) is 108.41%, way ahead of its industry average of 9.89%. ROE, a profitability measure, reflects how effectively a company is utilizing its shareholders’ funds in its operations to generate income.
Image Source: Zacks Investment Research
Another utility with a large volume of clean power generation capacity is NextEra Energy (NEE - Free Report) . NextEra’s ROE is 12.31%, better than the industry.
Vistra’s Capital Return Program
Vistra continues to increase its shareholders' value through its share repurchase program and dividend payments.
The company bought back shares worth over $5.4 billion from November 2021 through Aug. 1, 2025. VST’s management expects to continue with the buyback of shares and aims to repurchase shares worth $1.4 billion through year-end 2026.
VST’s board of directors has also approved a quarterly dividend of 22.60 cents for the third quarter of 2025 and is targeting an annual dividend payment of $300 million. VST has raised its dividend 16 times in the past five years. Check VST’s dividend history here.
NextEra Energy plans to increase the dividend rate annually by 10%, at least through 2026, from the 2024 base, subject to its board’s approval. The current annual dividend of the company is $2.27 per share, and the dividend yield of 3.19% is better than the Zacks S&P 500 Composite’s yield of 1.51%.
Summing Up
Vistra’s comprehensive hedging program, ROE better than the industry and solid capital return program make the stock attractive. Vistra stands to gain from the rising demand for clean electricity within its service region.
However, given its premium valuation and declining earnings estimates for 2025, it will be better for investors to maintain their current position in this Zacks Rank #3 (Hold) stock. New investors need to wait a little longer and look for a better entry point to add this stock.
Image: Bigstock
Vistra Trading at a Premium to Its Industry: How to Play the Stock?
Key Takeaways
Vistra Corp. (VST - Free Report) is currently trading at a premium valuation compared to its Zacks Utility Electric Power industry, with its forward 12-month price-to-earnings (P/E) ratio at 26.39X. The industry is currently trading at 14.43X and the broader Zacks Utilities Sector’s 15.86X.
Vistra aims to expand its business by making strategic investments in high-value retail, renewable and energy storage assets, while simultaneously lowering its carbon footprint and building a more sustainable company that delivers lasting value to its stakeholders. High availability rate of its generation assets increases the reliability of its services and allows the company to cater to the rising demand in its service territories efficiently.
Image Source: Zacks Investment Research
Vistra is currently trading at a premium compared with another industry operator, Duke Energy Corporation (DUK - Free Report) , which has a strong nuclear fleet. The current P/E- F12M ratio of DUK is 18.53X.
Backed by strong generation asset availability and consistent demand for its services, the company delivered steady performance, which has been mirrored in its share price. Over the past year, its stock has outpaced its industry rally.
Image Source: Zacks Investment Research
Relying solely on VST’s price gains without considering its premium valuation may not provide a complete picture for investors. A deeper look at the company’s fundamentals, growth drivers and market position is essential to assess whether now is an attractive entry point for adding VST stock to your portfolio.
Positive Forces Acting as Tailwinds for VST Stock
The development of large load data centers and electrification of oil field operations, primarily in the Permian Basin, continues to boost demand for its services. The company also gained from the addition of new residential customers in its service area.
Vistra benefits from a fully integrated model that unites power generation, retail electricity sales, and energy storage with sophisticated commodity risk management. Its robust generation fleet, coupled with a leading retail platform, enables it to capture value across both supply and demand. This setup creates a natural hedge against commodity volatility, improving earnings visibility, stabilizing cash flows and supporting consistent financial performance.
Vistra’s diverse multi-fuel generation portfolio provides a strong foundation for long-term growth. With a balanced mix of natural gas, nuclear, coal, and expanding renewable and battery storage resources, the company is well-positioned to adapt to the shifting U.S. energy landscape. This strategy ensures grid reliability, optimizes generation economics, and enables Vistra to capitalize, particularly during fuel price volatility or extreme weather events. As of Dec. 31, 2024, Vistra’s total generation capacity stood at 40,657 megawatts (“MW”), with natural gas accounting for 59%, coal 21%, nuclear 16% and renewables 4%.
Vistra’s strong hedging strategy significantly improves the visibility of its future earnings. As of Aug. 1, 2025, the company has fully hedged its projected production for the year and covered 95% of its expected output for 2026. This proactive approach enhances financial stability and reduces exposure to market fluctuations.
Earnings Estimates for VST Stock
The Zacks Consensus Estimate for VST’s 2025 earnings per share suggests a year-over-year decline of 10%, while 2026 earnings per share are showing a year-over-year improvement of 32.54%.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Duke Energy’s 2025 and 2026 earnings per share reflects a year-over-year growth of 7.12% and 6.06% respectively.
VST Stock’s ROE Higher Than Its Industry
VST’s trailing 12-month return on equity (ROE) is 108.41%, way ahead of its industry average of 9.89%. ROE, a profitability measure, reflects how effectively a company is utilizing its shareholders’ funds in its operations to generate income.
Image Source: Zacks Investment Research
Another utility with a large volume of clean power generation capacity is NextEra Energy (NEE - Free Report) . NextEra’s ROE is 12.31%, better than the industry.
Vistra’s Capital Return Program
Vistra continues to increase its shareholders' value through its share repurchase program and dividend payments.
The company bought back shares worth over $5.4 billion from November 2021 through Aug. 1, 2025. VST’s management expects to continue with the buyback of shares and aims to repurchase shares worth $1.4 billion through year-end 2026.
VST’s board of directors has also approved a quarterly dividend of 22.60 cents for the third quarter of 2025 and is targeting an annual dividend payment of $300 million. VST has raised its dividend 16 times in the past five years. Check VST’s dividend history here.
NextEra Energy plans to increase the dividend rate annually by 10%, at least through 2026, from the 2024 base, subject to its board’s approval. The current annual dividend of the company is $2.27 per share, and the dividend yield of 3.19% is better than the Zacks S&P 500 Composite’s yield of 1.51%.
Summing Up
Vistra’s comprehensive hedging program, ROE better than the industry and solid capital return program make the stock attractive. Vistra stands to gain from the rising demand for clean electricity within its service region.
However, given its premium valuation and declining earnings estimates for 2025, it will be better for investors to maintain their current position in this Zacks Rank #3 (Hold) stock. New investors need to wait a little longer and look for a better entry point to add this stock.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.