VST Vs NRG: Which Energy Stock Should Belong to Your Portfolio Now?

Investing in stocks within the Zacks Electric – Power industry offers significant advantages due to the country’s shift toward clean energy and strong government backing. The rising demand for electricity is driven by electric vehicles, AI-driven data centers, digital infrastructure and electric heating.

Legislation like the Inflation Reduction Act provides tax incentives and grants that lower investment risks and enhance returns in areas such as renewable energy and energy storage. These policies, aligned with national goals for decarbonization, create a favorable environment for long-term growth in the sector.

Technological advancements are improving the efficiency and affordability of energy production and distribution. Falling costs of solar and wind energy, coupled with innovations in battery storage and smart grid technology, are expanding investment opportunities across the entire power value chain.

Amid such a backdrop, let us focus on Vistra Corp. VST and NRG Energy Inc. NRG, the two leading U.S. independent power producers with diversified energy portfolios, including natural gas, nuclear and renewable assets. They are expanding their generation capacities to meet rising electricity demand driven by data centers and AI computing needs.

Vistra presents an investment opportunity due to its strategic positioning in the evolving U.S. energy landscape. The company boasts a diversified portfolio of natural gas, nuclear, solar and battery storage assets totaling 40.65 gigawatts of capacity. VST's acquisition of Energy Harbor has significantly bolstered its nuclear capacity, aligning with the increasing demand for reliable, low-carbon energy sources.

NRG Energy presents an investment opportunity, courtesy of its stable financial performance and strategic initiatives aimed at capitalizing on the evolving energy landscape. NRG is positioning itself to meet the rising electricity demand, driven by data centers and AI technologies. The acquisition of 18 natural gas power plants from LS Power is set to double NRG Energy's generation capacity to 25 gigawatts, enhancing its ability to supply reliable energy across nine states. NRG is well-positioned to deliver sustainable growth and returns, making it an attractive option for investors seeking exposure to the dynamic energy sector.

Both stocks mentioned above are the key operators in the utility space. Let us dive deeper and closely compare the fundamentals of the two stocks to determine which is a better investment option for investors.

VST & NRG’s Earnings Growth Projections

The Zacks Consensus Estimate for Vistra Energy’s earnings indicates a year-over-year decline of 15.57% for 2025 and growth of 34.59% for 2026. Long-term ( three to five years) earnings growth per share is pegged at 10.20%.

VST's Earnings Estimates

The Zacks Consensus Estimate for NRG Energy’s 2025 and 2026 earnings suggests year-over-year growth of 10.54% and 20.34%, respectively. Long-term earnings growth per share is pegged at 16.20%.

NRG Earnings Estimate Chart

Return on Equity (ROE)

ROE measures how efficiently the company is utilizing its shareholders’ funds to generate profits. VST’s current ROE is 87.33% compared with NRG’s ROE of 73.78%, both outperforming the industry’s ROE of 10.13%.

NRG & VST’s Dividend Yield

Utility companies generally distribute dividends and increase shareholders’ value. Currently, the dividend yield for NRG Energy is 1.12%, while the same for Vistra Energy is 0.57%. The dividend yields of both companies are lower than the industry’s yield of 3.19%.

Long-term Capital Expenditure Plans

The Zacks Utilities sector is capital-intensive, and regular investment is required to maintain and upgrade the electricity infrastructure. The decline in interest rates by 100 basis points and the possibility of more decline rates in the second half of 2025 gels well with the prospects of the companies operating in the Utility space. Vistra plans to invest $2.3 billion in 2025 to maintain its nuclear assets to procure nuclear fuel and for solar and energy storage development.

NRG Energy has made notable strides in its transformation into an integrated power company by prioritizing customer-centric strategies. Its strong performance has been driven in part by organic growth initiatives. NRG also announced a $750-million organic growth plan for 2025-2029.

Conclusion

NRG is expanding its operations through a combination of strategic acquisitions and organic growth, strengthening its capacity to deliver reliable energy across multiple U.S. states. Vistra is actively investing in clean energy initiatives to drive growth and stay competitive in the evolving energy market.

Both NRG and Vistra are leading energy providers with significant commitments to clean energy development, positioning them as the key operators in the ongoing transition to a low-carbon economy. With their robust strategies and strong market presence, both companies offer substantial growth potential for investors seeking long-term opportunities in the energy sector.

Despite both companies currently having a Zacks Rank #3 (Hold), our pick is NRG Energy, considering the above-mentioned parameters.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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