The Energy Stock Most Investors Overlook-And Why You Should Consider Adding It to Your Portfolio Today.

Many energy stocks rallied this year as the Middle East conflict drove up oil prices and the power-hungry cloud and AI markets gobbled up massive amounts of power. However, one former market darling that didn't participate in that rally was Vistra (NYSE: VST), the top power generation and retail electricity provider in the United States.

Vistra's stock has declined about 6% year to date and nearly 20% over the past 12 months. Let's see why many investors shunned Vistra -- and why it might be a compelling buy.

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Why did Vistra's rally end?

Vistra owns a wide range of natural gas, nuclear, coal, solar, and battery energy storage facilities. Its retail subsidiaries -- including TXU Energy, Dynegy, Homefield Energy, Ambit, and other regional leaders -- sell electricity to roughly five million customers.

Vistra's stock hit an all-time high of $217.02 on Sept. 22, 2025. That marked a 556% gain over its previous two years. At the time, the AI market's explosive growth generated strong tailwinds for its electrification business, and it was rerated as an AI infrastructure stock.

But as of this writing, Vistra's stock trades at about $150. Two challenges weighed down its stock. First, PJM Interconnection, which manages the power grid across the Mid-Atlantic and parts of the Midwest, proposed new rules to cap electricity capacity prices. Second, Vistra decided to shut down a major portion of its Moss Landing battery storage facility, which suffered a series of fires in early 2025, rather than recommission the damaged plants.

Why is Vistra still a reliable long-term investment?

Those headwinds made Vistra less appealing, but it's weathered plenty of regulatory challenges and plant outages (including the Texas winter storm of 2021) since its 2017 IPO. It's also still locked into major data center deals with Meta (NASDAQ: META) and Amazon (NASDAQ: AMZN).

From 2025 to 2028, analysts still expect its revenue and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to grow at CAGRs of 15% and 16%, respectively. With an enterprise value of $70.7 billion, Vistra trades at just three times this year's revenue and ten times this year's adjusted EBITDA.

Those lower valuations indicate it's shed the "AI premium" it gained after striking multi-billion dollar deals with Meta and Amazon, but that makes it an even more compelling buy today. Its forward yield of 0.6% might seem paltry, but its low payout ratio of 15% gives it plenty of room for future dividend hikes. It's also bought back 30% of its shares over the past five years. Therefore, if you're looking for a reliable energy stock that gives you plenty of exposure to the booming AI market, Vistra checks all the right boxes.

Leo Sun has positions in Amazon and Meta Platforms. The Motley Fool has positions in and recommends Amazon, Meta Platforms, and Vistra. The Motley Fool has a disclosure policy.