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CEG vs. TLN: Which Power-Producer Stock Has the Stronger Outlook?
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Key Takeaways
CEG's 2025-2026 EPS estimates rose 8.54% and 25.6%, while TLN's 2025 EPS fell 34.55% but surged in 2026.
CEG posts a 21.61% ROE versus TLN's 9.58%, both topping the industry's 8.01% average.
CEG plans $3-$3.5B in 2025-2026 capex, far exceeding TLN's $195-$300M investment targets.
The companies operating in the Zacks Alternative Energy – Other industry are gaining prominence as the electricity generation landscape undergoes a major transition. Concerns over climate change, stricter emission regulations and government incentives like tax credits are accelerating the shift away from fossil fuels. Utilities and independent power producers are increasingly investing in cleaner, more sustainable technologies to meet rising electricity demand driven by electric vehicles, data centers and industrial electrification. Constellation Energy Corporation (CEG - Free Report) and Talen Energy (TLN - Free Report) produce substantial volumes of clean energy to meet demand from their customers.
As renewable capacity expands and storage technologies improve, alternative energy is becoming a key pillar in achieving long-term energy security and a low-carbon future. The development of large battery storage units will assist in quicker deployment of renewable projects and provide clean power to millions of customers.
Constellation Energy stands out as a leading U.S. clean energy provider with one of the nation’s largest carbon-free generation portfolios, primarily driven by its extensive nuclear assets. The company is well-positioned to benefit from rising electricity demand, decarbonization mandates and corporate clean energy procurement. Its strong operational scale, strategic growth in renewable and zero-emission power, and stable cash flows make Constellation Energy a compelling investment for investors seeking exposure to sustainable energy leadership.
Talen Energy is benefiting from its significant clean energy generation capacity and strategic shift toward zero-carbon power. The company is repurposing legacy assets and expanding renewable and nuclear operations to deliver reliable, sustainable electricity. Talen Energy is expanding production capacity through strategic acquisitions. With its strong infrastructure footprint, focus on decarbonization and growing clean energy portfolio, Talen Energy is well positioned to capture value from rising electricity demand and accelerating clean power adoption across the United States.
Constellation Energy and Talen Energy are producing a large volume of clean energy and investing to further expand clean energy production capacity. A closer comparison of their fundamentals can help identify which stock offers the stronger investment opportunity.
CEG & TLN’s Earnings Growth Projections
The Zacks Consensus Estimate for Constellation Energy’s earnings per share in 2025 and 2026 has increased year over year by 8.54% and 25.6%, respectively. Long-term (three to five years) growth for earnings per share is pegged at 16.22%.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Talen Energy’s earnings per share in 2025 indicates a year-over-year decline of 34.55%, while 2026 shows an increase of 284.1%. Long-term growth for earnings per share is pegged at 28.55%.
Image Source: Zacks Investment Research
Return on Equity
Return on Equity (“ROE”) is an important measure of financial performance that indicates how efficiently a company converts shareholder equity into profits. It highlights management’s effectiveness in utilizing invested capital to grow earnings and enhance shareholder value.
CEG’s current ROE is 21.61% compared with TLN’s 9.58%. Both companies also outperform the industry’s ROE of 8.01%.
Debt to Capital
The Zacks Oil-Energy sector is a capital-intensive one, and huge investments are required at regular intervals to upgrade, maintain and expand operations. Exploration and Production activities, purchase of new acreage, maintenance of pipelines, refineries and infrastructure involve a lot of expenses. The decline in interest rates from historic highs is going to be beneficial for the capital-intensive oil and gas firms.
CEG’s debt-to-capital currently stands at 43.8% compared with TLN’s 71.06%. Both companies are using debt to fund their business. However, CEG’s debt levels are marginally lower than the industry’s 43.81%.
Image Source: Zacks Investment Research
Capital Expenditure Plans
CEG’s strategic investment plans and the focus on continuing to expand renewable portfolio drive its earnings performance. It expects capital expenditures of nearly $3 billion and $3.5 billion for 2025 and 2026, respectively.
Talen Energy plans to invest in the range of $195 million to $205 million in 2025 and $280 million to $300 million in 2026, to expand its operations.
Valuation
Constellation Energy currently appears to trade at a premium compared with Talen Energy on a Price/Earnings Forward 12-month basis. (P/E- F12M).
CEG and TLN are currently trading at 33.77X and 20.56X, respectively, compared with the industry’s 23.99X.
Price Performance
Constellation Energy has gained 14.1% in the last three months compared with Talen Energy’s rise of 5.2% in the same time period.
Image Source: Zacks Investment Research
Summing Up
CEG’s better movement in earnings estimates in 2025, stronger ROE, lower debt usage and wider capital expenditure plans make it a better choice in the alternative energy space.
TLN currently has a cheaper valuation, but given the above parameters, CEG is a better pick among the two Zacks Rank#3 (Hold) stocks.
Image: Bigstock
CEG vs. TLN: Which Power-Producer Stock Has the Stronger Outlook?
Key Takeaways
The companies operating in the Zacks Alternative Energy – Other industry are gaining prominence as the electricity generation landscape undergoes a major transition. Concerns over climate change, stricter emission regulations and government incentives like tax credits are accelerating the shift away from fossil fuels. Utilities and independent power producers are increasingly investing in cleaner, more sustainable technologies to meet rising electricity demand driven by electric vehicles, data centers and industrial electrification. Constellation Energy Corporation (CEG - Free Report) and Talen Energy (TLN - Free Report) produce substantial volumes of clean energy to meet demand from their customers.
As renewable capacity expands and storage technologies improve, alternative energy is becoming a key pillar in achieving long-term energy security and a low-carbon future. The development of large battery storage units will assist in quicker deployment of renewable projects and provide clean power to millions of customers.
Constellation Energy stands out as a leading U.S. clean energy provider with one of the nation’s largest carbon-free generation portfolios, primarily driven by its extensive nuclear assets. The company is well-positioned to benefit from rising electricity demand, decarbonization mandates and corporate clean energy procurement. Its strong operational scale, strategic growth in renewable and zero-emission power, and stable cash flows make Constellation Energy a compelling investment for investors seeking exposure to sustainable energy leadership.
Talen Energy is benefiting from its significant clean energy generation capacity and strategic shift toward zero-carbon power. The company is repurposing legacy assets and expanding renewable and nuclear operations to deliver reliable, sustainable electricity. Talen Energy is expanding production capacity through strategic acquisitions. With its strong infrastructure footprint, focus on decarbonization and growing clean energy portfolio, Talen Energy is well positioned to capture value from rising electricity demand and accelerating clean power adoption across the United States.
Constellation Energy and Talen Energy are producing a large volume of clean energy and investing to further expand clean energy production capacity. A closer comparison of their fundamentals can help identify which stock offers the stronger investment opportunity.
CEG & TLN’s Earnings Growth Projections
The Zacks Consensus Estimate for Constellation Energy’s earnings per share in 2025 and 2026 has increased year over year by 8.54% and 25.6%, respectively. Long-term (three to five years) growth for earnings per share is pegged at 16.22%.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Talen Energy’s earnings per share in 2025 indicates a year-over-year decline of 34.55%, while 2026 shows an increase of 284.1%. Long-term growth for earnings per share is pegged at 28.55%.
Image Source: Zacks Investment Research
Return on Equity
Return on Equity (“ROE”) is an important measure of financial performance that indicates how efficiently a company converts shareholder equity into profits. It highlights management’s effectiveness in utilizing invested capital to grow earnings and enhance shareholder value.
CEG’s current ROE is 21.61% compared with TLN’s 9.58%. Both companies also outperform the industry’s ROE of 8.01%.
Debt to Capital
The Zacks Oil-Energy sector is a capital-intensive one, and huge investments are required at regular intervals to upgrade, maintain and expand operations. Exploration and Production activities, purchase of new acreage, maintenance of pipelines, refineries and infrastructure involve a lot of expenses. The decline in interest rates from historic highs is going to be beneficial for the capital-intensive oil and gas firms.
CEG’s debt-to-capital currently stands at 43.8% compared with TLN’s 71.06%. Both companies are using debt to fund their business. However, CEG’s debt levels are marginally lower than the industry’s 43.81%.
Image Source: Zacks Investment Research
Capital Expenditure Plans
CEG’s strategic investment plans and the focus on continuing to expand renewable portfolio drive its earnings performance. It expects capital expenditures of nearly $3 billion and $3.5 billion for 2025 and 2026, respectively.
Talen Energy plans to invest in the range of $195 million to $205 million in 2025 and $280 million to $300 million in 2026, to expand its operations.
Valuation
Constellation Energy currently appears to trade at a premium compared with Talen Energy on a Price/Earnings Forward 12-month basis. (P/E- F12M).
CEG and TLN are currently trading at 33.77X and 20.56X, respectively, compared with the industry’s 23.99X.
Price Performance
Constellation Energy has gained 14.1% in the last three months compared with Talen Energy’s rise of 5.2% in the same time period.
Image Source: Zacks Investment Research
Summing Up
CEG’s better movement in earnings estimates in 2025, stronger ROE, lower debt usage and wider capital expenditure plans make it a better choice in the alternative energy space.
TLN currently has a cheaper valuation, but given the above parameters, CEG is a better pick among the two Zacks Rank#3 (Hold) stocks.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.