1 Reason Why Now Is a Great Time to Buy Vistra

You can't talk about the AI revolution without discussing the surging demand for power it has created. In particular, nuclear energy has come back into focus. There's a two-part reason why now is a great time to buy stock in power generation company Vistra (NYSE: VST), and it has to do with two tech giants.

Tech companies love nuclear

Last week, Vistra announced that Meta Platforms (NASDAQ: META) had entered a 20-year power purchase agreement involving three Vistra-owned nuclear plants. This isn't just lip service from Meta leader Mark Zuckerberg; this is a real investment that'll have a positive ripple effect for energy investors.

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More than a year ago, Nvidia (NASDAQ: NVDA) CEO Jensen Huang made comments about how nuclear would be necessary and a "wonderful way forward." The energy demand is so immense that Huang also discussed how all forms of energy will be needed. This is even better news for Vistra investors, as the company owns and operates nuclear, natural gas, coal, and solar generation facilities as well as battery energy storage facilities.

Vistra's ability to rise to the occasion through dispatchable generation -- which can be ramped up and down quickly to meet real-time needs -- means the company is capable of serving the needs of data centers. Electricity demand is heating up quickly. It's expected that 12% of U.S. electricity consumption will be from data centers by 2028. That's a threefold increase from just 2023.

Vistra's future looks bright

Vistra's stock trades at a forward price-to-earnings (P/E) ratio just shy of 18 and an enterprise value-to-EBITDA ratio of 15. Not only do I believe Vistra is fairly priced right now, but I would anticipate strong growth from Vistra in the next few years. The company revised guidance upward in its early November earnings report. As a bonus, Vistra has also rewarded shareholders with quarterly dividends since 2019, though it yields under 1% right now. For investors wanting to find a way to get on the energy wave through a proven entity, Vistra is worth a look.

Catie Hogan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Meta Platforms and Nvidia. The Motley Fool has a disclosure policy.