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Vistra or Southern Co.: Which Utility Stock Looks Stronger in 2026?
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Key Takeaways
Vistra broadened its nuclear fleet with the Energy Harbor acquisition and launched Vistra Vision.
VST has most output hedged through 2028, including 3.8 GW under 20-year PPAs with Amazon and Meta.
VST currently trading at P/E-F12M of 16.55X cheaper compared with SO's 19.91X.
The companies operating in the Zacks Utility -Electric Power industry present a strong long-term investment opportunity, supported by its highly regulated framework that ensures predictable cash flows and steady returns. Most utilities operate primarily within domestic markets, benefiting from rate-based growth driven by ongoing investments in infrastructure, grid modernization and system reliability. This regulatory environment helps insulate earnings from economic fluctuations, making the sector particularly appealing to income-focused and defensive investors.
The utility industry is undergoing a significant shift toward cleaner energy. Companies are lowering emissions by phasing out coal-fired plants, expanding renewable capacity and investing in transmission infrastructure to support wind and solar generation. At the same time, nuclear energy is gaining renewed importance as a dependable, carbon-free baseload source that helps balance the variability of renewables.
Nuclear energy contributes nearly 20% of the total power produced in the United States. Both Vistra Corp. (VST - Free Report) and The Southern Company (SO - Free Report) have exposure in nuclear energy. These prominent U.S. electric utilities are actively investing in renewable energy, making them pivotal players in the shift toward cleaner power generation.
Vistra is becoming a leading player in nuclear power after the 2023 acquisition of Energy Harbor, which expanded its nuclear portfolio and supported the launch of Vistra Vision, the zero-carbon generation business. Earnings visibility is improving as the company secures long-term contracts and hedges a significant portion of output, with most production through 2028 already locked in. Around 3.8 GW is backed by 20-year power purchase agreements, including deals with Amazon and Meta Platforms, strengthening both growth prospects and revenue stability.
Southern Company offers reliable long-term value through its regulated utility operations and focused investments in cleaner energy. Backed by a diversified generation mix, a strong customer base and supportive regulation, the company delivers stable earnings and consistent dividend growth. The company’s decarbonization strategy, including nuclear expansion and growing renewable capacity, positions it well for the energy transition. SO also has a large load growth pipeline exceeding 75 GW, with 10 GW already secured under signed contracts and an additional 3 GW in advanced negotiations reflected in its outlook.
As both companies hold strong positions in the utility sector, examining their core fundamentals is essential. A focused comparison can clarify which one presents the more compelling investment opportunity.
VST & SO’s Earnings Growth Projections
The Zacks Consensus Estimate for Vistra’s earnings per share in 2026 and 2027 indicates year-over-year growth of 65.78% and 27.02%, respectively. Long-term (three to five years) earnings growth per share is pegged at 18.89%.
Image Source: Zacks Investment Research
The same for Southern Company’s earnings per share in 2026 and 2027 implies year-over-year growth of 6.51% and 7.57%, respectively. Long-term earnings growth per share is pegged at 7.23%.
Image Source: Zacks Investment Research
Return on Equity
Return on equity (“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 81.09% compared with SO’s 12.52%. Vistra also outperforms the industry’s ROE of 11.06%.
Image Source: Zacks Investment Research
Debt to Capital & TIE Ratio
The Utility industry 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 the internal cash generation to fund their long-term investments.
Vistra’s debt-to-capital currently stands at 78.67% compared with Southern Company’s 64.9%. Both companies are using higher debt to fund their business, as the industry’s debt-to-capital stands at 60.73%.
Image Source: Zacks Investment Research
The Times Interest Earned Ratio of VST and SO at the end of the previous reported quarter was 2 and 2.5, respectively, which indicates both have enough financial capacity to meet their interest obligation without any difficulties.
Valuation
Southern Company currently appears to be trading at a premium compared with Vistra on a Price/Earnings Forward 12-month basis. (P/E- F12M).
VST is currently trading at 16.08X compared with SO's 19.91X.
Image Source: Zacks Investment Research
Price Performance
In the past year, Vistra’s shares have risen 12% against Southern Company’s decline of 2.2%.
Price Performance (One year)
Image Source: Zacks Investment Research
Summing Up
Vistra and Southern Company are investing in strengthening infrastructure and are focused on adding more clean electricity generation assets to their portfolio.
Based on the above discussion, Vistra currently has a marginal edge over Southern Company, despite both stocks carrying a Zacks Rank #3 (Hold). Vistra offers a more compelling near-term investment case given its relatively cheaper valuation, stronger movement in earnings estimates and better ROE. Also, healthier price movement makes Vistra a better choice in the utility space compared with Southern Company.
View the Zacks #1 Rank List
Image: Bigstock
Vistra or Southern Co.: Which Utility Stock Looks Stronger in 2026?
Key Takeaways
The companies operating in the Zacks Utility -Electric Power industry present a strong long-term investment opportunity, supported by its highly regulated framework that ensures predictable cash flows and steady returns. Most utilities operate primarily within domestic markets, benefiting from rate-based growth driven by ongoing investments in infrastructure, grid modernization and system reliability. This regulatory environment helps insulate earnings from economic fluctuations, making the sector particularly appealing to income-focused and defensive investors.
The utility industry is undergoing a significant shift toward cleaner energy. Companies are lowering emissions by phasing out coal-fired plants, expanding renewable capacity and investing in transmission infrastructure to support wind and solar generation. At the same time, nuclear energy is gaining renewed importance as a dependable, carbon-free baseload source that helps balance the variability of renewables.
Nuclear energy contributes nearly 20% of the total power produced in the United States. Both Vistra Corp. (VST - Free Report) and The Southern Company (SO - Free Report) have exposure in nuclear energy. These prominent U.S. electric utilities are actively investing in renewable energy, making them pivotal players in the shift toward cleaner power generation.
Vistra is becoming a leading player in nuclear power after the 2023 acquisition of Energy Harbor, which expanded its nuclear portfolio and supported the launch of Vistra Vision, the zero-carbon generation business. Earnings visibility is improving as the company secures long-term contracts and hedges a significant portion of output, with most production through 2028 already locked in. Around 3.8 GW is backed by 20-year power purchase agreements, including deals with Amazon and Meta Platforms, strengthening both growth prospects and revenue stability.
Southern Company offers reliable long-term value through its regulated utility operations and focused investments in cleaner energy. Backed by a diversified generation mix, a strong customer base and supportive regulation, the company delivers stable earnings and consistent dividend growth. The company’s decarbonization strategy, including nuclear expansion and growing renewable capacity, positions it well for the energy transition. SO also has a large load growth pipeline exceeding 75 GW, with 10 GW already secured under signed contracts and an additional 3 GW in advanced negotiations reflected in its outlook.
As both companies hold strong positions in the utility sector, examining their core fundamentals is essential. A focused comparison can clarify which one presents the more compelling investment opportunity.
VST & SO’s Earnings Growth Projections
The Zacks Consensus Estimate for Vistra’s earnings per share in 2026 and 2027 indicates year-over-year growth of 65.78% and 27.02%, respectively. Long-term (three to five years) earnings growth per share is pegged at 18.89%.
Image Source: Zacks Investment Research
The same for Southern Company’s earnings per share in 2026 and 2027 implies year-over-year growth of 6.51% and 7.57%, respectively. Long-term earnings growth per share is pegged at 7.23%.
Image Source: Zacks Investment Research
Return on Equity
Return on equity (“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 81.09% compared with SO’s 12.52%. Vistra also outperforms the industry’s ROE of 11.06%.
Image Source: Zacks Investment Research
Debt to Capital & TIE Ratio
The Utility industry 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 the internal cash generation to fund their long-term investments.
Vistra’s debt-to-capital currently stands at 78.67% compared with Southern Company’s 64.9%. Both companies are using higher debt to fund their business, as the industry’s debt-to-capital stands at 60.73%.
Image Source: Zacks Investment Research
The Times Interest Earned Ratio of VST and SO at the end of the previous reported quarter was 2 and 2.5, respectively, which indicates both have enough financial capacity to meet their interest obligation without any difficulties.
Valuation
Southern Company currently appears to be trading at a premium compared with Vistra on a Price/Earnings Forward 12-month basis. (P/E- F12M).
VST is currently trading at 16.08X compared with SO's 19.91X.
Image Source: Zacks Investment Research
Price Performance
In the past year, Vistra’s shares have risen 12% against Southern Company’s decline of 2.2%.
Price Performance (One year)
Image Source: Zacks Investment Research
Summing Up
Vistra and Southern Company are investing in strengthening infrastructure and are focused on adding more clean electricity generation assets to their portfolio.
Based on the above discussion, Vistra currently has a marginal edge over Southern Company, despite both stocks carrying a Zacks Rank #3 (Hold). Vistra offers a more compelling near-term investment case given its relatively cheaper valuation, stronger movement in earnings estimates and better ROE. Also, healthier price movement makes Vistra a better choice in the utility space compared with Southern Company.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.