Vistra Rises 65.9% in Six Months: Should You Buy the Stock?

Core Viewpoint - Vistra Corp. has experienced a significant stock price increase of 65.9% over the past six months, outperforming the Zacks Utility-Electric Power industry, which grew by 9.3%, primarily due to strong retail and commercial operations [1]. Group 1: Financial Performance - The Zacks Consensus Estimate for Vistra's earnings per share has risen by 5.53% for 2024 and 9.42% for 2025 in the last 60 days [13]. - Vistra's trailing 12-month return on equity (ROE) stands at 57.63%, significantly higher than the industry average of 10.99% [16]. - The company has repurchased over $4.25 billion in shares since November 2021, leading to a 29% reduction in outstanding shares [14]. Group 2: Operational Strengths - Vistra benefits from strong residential and business results in Texas, Midwest, and Northeast markets, with over 96% commercial availability of fossil generation and more than 98% capacity factor of its nuclear fleet in Q3 [2]. - The demand for clean electricity is increasing in Vistra's service area, driven by the rise of data centers and electrification of oil field operations, particularly in the Permian Basin [9]. - Vistra has hedged 100% of its expected generation volumes for the remainder of 2024, 96% for 2025, and about 64% for 2026, supporting its guidance [10]. Group 3: Market Position and Valuation - Vistra is currently trading at a forward 12-month price-to-earnings (P/E) ratio of 23.55X, which is a premium compared to the industry average of 15.97X and Duke Energy Corporation's P/E of 17.24X [18]. - The company is expanding its clean energy generation portfolio and has received approval to operate its Comanche Peak nuclear plant for an additional 20 years [11]. Group 4: Future Outlook - The company is well-positioned to benefit from the anticipated $1 trillion investment in data centers by major tech companies over the next five years [12]. - Vistra's management continues to focus on increasing shareholder value through share repurchases and dividends, with a quarterly dividend of 22.15 cents reflecting a sequential increase of 0.9% [15]. - The stock is considered deserving of a premium valuation due to its positive earnings outlook and operational strengths [21].