Vistra Corp. (VST): Among the Best Stocks to Buy During Recession

We recently compiled a list of the 15 Best Stocks to Buy During Recession. In this article, we are going to take a look at where Vistra Corp. (NYSE:VST) stands against the other stocks.

As per BlackRock, 2025 started with a bumpy ride for the US stocks. That being said, the asset manager believes that the sentiment has been a critical driver, but fundamentals seem to be healthy. This makes up for an optimistic longer-run outlook. Despite the tariff shocks creating difficult markets, the firm is constructive in its outlook and opines that volatility is an opportunity to capitalize on stock dispersion. Furthermore, Asia continues to exhibit a diversification opportunity for making investments in the AI theme, with equities providing low correlation to US counterparts.

Amidst Worries, There Is a Silver Lining

The trade and tariff uncertainty, which fueled the early-year volatility, advanced at the beginning of Q2 due to the US tariff pronouncements, according to the investment management company. This resulted in a global market meltdown and revived fears related to recession. However, as the quarter progressed, the tariff tensions took a backseat, and there was some optimism visible in the broader US markets. The asset manager believes that, while tariffs remain a critical measure, the potential for market-supporting policies like deregulation and corporate tax cuts provides some room for emergent optimism.

The firm highlighted the importance of an active approach in a bid to capitalize on inefficiencies and to make precise and intentional decisions amidst historic change and transition. While the results of bilateral tariff negotiations remain unpredictable, having a pulse on company dynamics, mainly when the macro picture remains unclear, can act as a differentiator for portfolios.

Policy Measures Likely to Support Moving Forward

The firm opines that corporate strength has supported the US equities’ momentum, and it comes through in earnings and market share. As per the firm, relatively pro-industry policies have stimulated healthy FCF. Several companies throughout different time frames have deployed the cash for future business growth. Even though the policy uncertainty in the current time of transition led to the pause in large investment decisions, the company believes that moves toward deregulation and the reshoring of supply chains once policy gets settled can result in the revival of CapEx spending throughout industries, such as technology and industrials. Despite tariffs dominating, the asset manager expects that deregulation and other policy priorities can regain attention. The high drive for innovation is the long-term secular trend that can support the US equities.

Our Methodology

To list the 15 Best Stocks to Buy During Recession, we considered the stocks from recession-proof industries such as utilities, consumer defensive, and healthcare. After getting an extensive list of 25-30 stocks, we chose the ones popular among hedge funds. Finally, the stocks were arranged in ascending order of their hedge fund sentiments, as of Q4 2024.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

Vistra Corp. (NYSE:VST)

Number of Hedge Fund Holders: 120

Vistra Corp. (NYSE:VST) operates as an integrated retail electricity and power generation company. Goldman Sachs initiated coverage of the company’s stock with a “Neutral” rating and a price objective of $134. The firm sees Vistra Corp. (NYSE:VST) as well-placed to benefit from increased power demand. The company remains well-placed to serve customer needs and grow with the overall electrification trends in the broader industry. During Q4 2024, the company advanced its efforts in solar, energy storage, and nuclear by executing the renewable development pipeline. It brought online the first 2 projects, which are part of its Illinois Coal to Solar & Energy Storage Initiative at Baldwin (70 MW) and Coffeen (46 MW), revitalizing retired and to-be-retired coal plant sites.

Next, Vistra Corp. (NYSE:VST) grew its ownership interest in nuclear by closing on an agreement for the acquisition of the entire 15% minority interest in its Vistra Vision subsidiary, making the company the sole owner of its highly valuable, carbon-free assets. This acquisition increased its nuclear ownership by ~970 MW and its solar and energy storage ownership by ~200 MW. Elsewhere, Morningstar believes that the company remains well-placed to benefit from potential electricity demand growth associated with new data centers, manufacturing, and EVs. Moving forward, Vistra Corp. (NYSE:VST)’s growth is expected to be driven by its scale and size, together with its diversified portfolio of energy generation assets.

ClearBridge Investments, an investment management company, released its Q1 2025 investor letter. Here is what the fund said:

“Volatility also created entry points to motivate our first purchase in the utility sector, Vistra Corp. (NYSE:VST), as well as reduce our underweight to the consumer discretionary sector with the addition of CAVA Group. Vistra is the largest competitive power generator in the U.S. with a 41 GW fleet of power plants diversified by geography and fuel sources. Long-term fundamentals of the deregulated power markets remain constructive with Vistra well positioned to benefit from continued tightening in its primary PJM (Pennsylvania, New Jersey, Maryland Interconnection) and ERCOT (Texas) markets. Pending regulatory clarity could also pave the way for additional power purchase agreements with hyperscalers and act as a positive catalyst for independent power producer stocks. These agreements, in combination with federal subsidies for nuclear plants, have the potential to improve visibility and lower earnings variability across the industry.”

Overall VST ranks 2nd on our list of the best stocks to buy during recession. While we acknowledge the potential of VST as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for a deeply undervalued AI stock that is more promising than VST but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

Disclosure: None. This article is originally published at Insider Monkey.