Industry Overview - Companies in the Zacks Utility – Electric Power industry present an attractive investment case due to stable cash flows and predictable earnings supported by regulated business models [1] - Long-term power purchase agreements help shield many U.S. utilities from economic volatility, while growing electricity demand from AI-driven data centers, electric vehicle adoption, and reshoring manufacturing creates new growth opportunities [1] Company Analysis: Dominion Energy - Dominion Energy offers a strong long-term investment case due to its regulated model, stable cash flows, and reliable dividends, positioning it well for income-focused investors [3] - The company is investing $50 billion in capital expenditures from 2025 to 2029 to strengthen its operations, which is significantly higher than Vistra's $2.2 billion annual investment plan [12] - Dominion's earnings per share (EPS) estimates for 2025 and 2026 increased year over year by 22.74% and 5.93%, respectively, with long-term earnings growth pegged at 10.26% [8] - Dominion has a dividend yield of 4.51% and a lower debt-to-capital ratio of 57.71%, making it financially healthier compared to Vistra [9][15] Company Analysis: Vistra Corp. - Vistra Corp. is attractive due to a balanced mix of natural gas, nuclear, solar, and battery storage assets, providing strong cash flow visibility and disciplined capital allocation [4] - The Zacks Consensus Estimate for Vistra's EPS in 2025 decreased by 26.29% but is projected to increase by 62.33% in 2026, with long-term earnings growth pegged at 11.67% [5][8] - Vistra's current dividend yield is 0.56%, significantly lower than Dominion's, and it has a higher debt-to-capital ratio of 75.11% [11][15] Valuation and Performance - Dominion is currently trading at a forward P/E of 16.39X, which is cheaper compared to Vistra's 19.42X and the industry's average of 14.65X [16][18] - Over the past six months, Dominion's shares have gained 4.8%, while Vistra's shares have declined by 11.9%, with the sector returning 7.6% [19] Conclusion - Overall, Dominion is in a better position compared to Vistra due to stable earnings growth, better dividend yield, elaborate capital expenditure plan, lower debt usage, and cheaper valuation [24] - Dominion currently holds a Zacks Rank 2 (Buy), while Vistra carries a Zacks Rank 3 (Hold), indicating a stronger investment case for Dominion [25]

Core Insights - Vistra Corp. (VST) is currently trading below its 50-day simple moving average (SMA), indicating a short-term bearish trend, with a stock price of $161.67 as of December 23, 2025, down 26.5% from its 52-week high of $219.82 [1][8] - The company has a total generation capacity of 40,657 MW, with nearly 59% derived from natural gas assets, and a market capitalization of $54.77 billion [2] - Over the past year, VST shares have increased by 12.8%, while the Zacks Utility – Electric Power industry has seen a rally of 18.6% [6] Financial Performance - The Zacks Consensus Estimate for VST's 2025 earnings per share indicates a year-over-year decline of 32.57%, while the estimate for 2026 suggests an increase of 77.39% [16] - VST's trailing 12-month return on equity (ROE) is 64.04%, significantly higher than the industry average of 9.84%, indicating efficient utilization of shareholders' funds [19] - Vistra is trading at a premium valuation with a forward 12-month price-to-earnings (P/E) ratio of 19.47X compared to the industry average of 15.24X [21] Shareholder Value - The company is committed to increasing shareholder value through a share repurchase program and dividend payments, with a quarterly dividend of 22.7 cents approved for Q4 2025 and a target of $300 million in annual dividends [23] - An additional $1 billion has been approved for share repurchases, with $2.2 billion remaining under the current authorization expected to be fully utilized by the end of 2027 [24] Market Position and Growth Potential - Vistra benefits from strong power demand, high nuclear availability, and a diversified generation portfolio, which supports long-term growth [8][10] - The rising demand for clean electricity, driven by AI data centers and electrification in the Permian Basin, presents new opportunities for Vistra [14] - The company has a well-defined capital expenditure plan focused on expanding zero-carbon nuclear output and optimizing its natural gas fleet [15]

Core Insights - NRG Energy is set to release its Q3 2025 results on November 6, with earnings estimated at $2.26 per share and revenues of $7.16 billion, reflecting a 22.16% increase year-over-year despite a slight revenue decline of 0.90% [1][4][20] - Earnings estimates have increased by 23.50% over the past 60 days, indicating positive market sentiment [1][4] - The company has a history of earnings surprises, beating estimates in three of the last four quarters with an average surprise of 26.22% [2] Earnings Prediction - The current model does not predict an earnings beat for NRG Energy, as it has an Earnings ESP of 0.00% and a Zacks Rank of 3 (Hold) [3][5] - Other companies in the sector, such as Duke Energy and Alliant Energy, have more favorable earnings surprise indicators [6] Factors Influencing Q3 Earnings - NRG Energy serves a diverse customer base, ensuring strong customer retention which is expected to positively impact earnings [7] - Strategic acquisitions and the demand for clean power from data centers are likely to contribute to earnings growth [8] - The company’s free cash flow generation allows for share buybacks, which can enhance earnings per share [8] Stock Performance - NRG Energy's shares have increased by 44.6% over the past six months, outperforming the Zacks Utility – Electric Power industry, which rose by 7.6% [11] - The trailing 12-month return on equity (ROE) for NRG Energy is 88.22%, significantly higher than the industry average of 10.35%, indicating efficient use of shareholder equity [12] Valuation Metrics - NRG Energy is currently trading at a forward P/E ratio of 18.24, which is a premium compared to the industry average of 15.3 [14] Strategic Initiatives - The company is focused on reducing its debt by $3.7 billion over the next 24-36 months to maintain investment-grade credit metrics, which will lower capital servicing expenses and improve margins [18] - The rapid expansion of AI-driven data centers in NRG Energy's service area presents long-term growth opportunities [19] Conclusion - NRG Energy is expected to benefit from stable demand from its diverse customer base and increasing demand from data centers, along with contributions from organic and inorganic growth initiatives, debt reduction efforts, and share buybacks [20]

Industry Overview - The Zacks Utility – Electric Power industry offers attractive investment opportunities due to stable cash flows and predictable regulated business models, with most domestic utilities operating under long-term power purchase agreements [1] - The industry is transitioning towards cleaner energy sources, with significant investments in renewable infrastructure such as solar, wind, and battery storage, positioning utilities that embrace these technologies favorably in the market [2] Company Comparisons - NextEra Energy (NEE) is recognized for its clean energy investments and growth potential, with its regulated utility arm, Florida Power & Light, providing reliable cash flows, while its unregulated subsidiary leads in wind and solar energy generation [3] - The Southern Company (SO) delivers long-term value through its regulated operations and clean energy investments, benefiting from a diverse power generation portfolio and a supportive regulatory framework [4] Earnings Growth Projections - The Zacks Consensus Estimate for NEE's earnings per share remains unchanged for 2025 and 2026, with long-term earnings growth projected at 7.89% [6] - SO's earnings estimate for 2026 has increased by 0.44%, with long-term earnings growth pegged at 6.77% [8] Dividend Yield - NEE's current dividend yield is 3.15%, while SO's is slightly lower at 3.10%, indicating both companies' commitment to returning value to shareholders [9] Return on Equity (ROE) - NEE's ROE stands at 12.31%, while SO's is at 12.7%, both exceeding the industry's average ROE of 10.16% [11] Capital Investment - NEE plans to invest over $74 billion in capital through 2029 to expand its clean energy capacity, while SO plans to invest $63 billion from 2025 through 2029 [13] Debt to Capital - NEE's debt-to-capital ratio is 57.61%, compared to SO's 62.84%, with both companies utilizing higher debt levels relative to the industry's average of 54.08% [15] Valuation - NEE is trading at a lower Price/Earnings (P/E) ratio of 18.69X compared to SO's 21.44X, while the industry average stands at 14.84X [16] Price Performance - SO's shares have increased by 14.2% over the past six months, while NEE's shares have only gained 1.9%, with the industry average return at 10.9% [17] Conclusion - The Southern Company currently holds a marginal advantage over NextEra Energy due to positive earnings estimate movements, higher ROE, and better stock performance, despite both companies carrying a Zacks Rank 3 (Hold) [19]