Financial Comparison: Vistra (NYSE:VST) and Clearway Energy (NYSE:CWEN)

Vistra (NYSE:VST) and Clearway Energy (NYSE:CWEN) are both utilities companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, earnings, analyst recommendations, dividends, institutional ownership, valuation and risk.

Institutional and Insider Ownership

90.9% of Vistra shares are owned by institutional investors. Comparatively, 84.5% of Clearway Energy shares are owned by institutional investors. 0.9% of Vistra shares are owned by company insiders. Comparatively, 0.5% of Clearway Energy shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Vistra and Clearway Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Vistra	11.55%	108.68%	7.67%
Clearway Energy	5.78%	1.60%	0.55%

Valuation & Earnings

This table compares Vistra and Clearway Energy”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Vistra	$17.74 billion	2.37	$944.00 million	$5.92	21.13
Clearway Energy	$1.43 billion	4.89	$169.00 million	$0.76	44.80

Vistra has higher revenue and earnings than Clearway Energy. Vistra is trading at a lower price-to-earnings ratio than Clearway Energy, indicating that it is currently the more affordable of the two stocks.

Dividends

Vistra pays an annual dividend of $0.92 per share and has a dividend yield of 0.7%. Clearway Energy pays an annual dividend of $1.90 per share and has a dividend yield of 5.6%. Vistra pays out 15.5% of its earnings in the form of a dividend. Clearway Energy pays out 250.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Vistra has increased its dividend for 6 consecutive years and Clearway Energy has increased its dividend for 2 consecutive years.

Volatility & Risk

Vistra has a beta of 1.37, meaning that its stock price is 37% more volatile than the S&P 500. Comparatively, Clearway Energy has a beta of 0.81, meaning that its stock price is 19% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings for Vistra and Clearway Energy, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Vistra	1	3	19	1	2.83
Clearway Energy	0	1	7	2	3.10

Vistra presently has a consensus target price of $205.00, indicating a potential upside of 63.91%. Clearway Energy has a consensus target price of $42.00, indicating a potential upside of 23.37%. Given Vistra’s higher probable upside, equities research analysts plainly believe Vistra is more favorable than Clearway Energy.

Summary

Vistra beats Clearway Energy on 13 of the 18 factors compared between the two stocks.

About Vistra

Vistra Corp., together with its subsidiaries, operates as an integrated retail electricity and power generation company. The company operates through six segments: Retail, Texas, East, West, Sunset, and Asset Closure. It retails electricity and natural gas to residential, commercial, and industrial customers across states in the United States and the District of Columbia. In addition, the company is involved in the electricity generation, wholesale energy purchases and sales, commodity risk management, fuel production, and fuel logistics management activities. It serves approximately 4 million customers with a generation capacity of approximately 37,000 megawatts with a portfolio of natural gas, nuclear, coal, solar, and battery energy storage facilities. The company was formerly known as Vistra Energy Corp. and changed its name to Vistra Corp. in July 2020. Vistra Corp. was founded in 1882 and is based in Irving, Texas.

About Clearway Energy

Clearway Energy, Inc. operates in the renewable energy business in the United States. The company operates through Conventional and Renewables segments. It has approximately 6,000 net MW of installed wind, solar, and energy generation projects; and approximately 2,500 net MW of natural gas-fired generation facilities. The company was formerly known as NRG Yield, Inc. and changed its name to Clearway Energy, Inc. in August 2018. Clearway Energy, Inc. was incorporated in 2012 and is based in Princeton, New Jersey. Clearway Energy, Inc. is a subsidiary of Clearway Energy Group LLC.