Meet the Monster Stock That Continues to Crush the Market

Vistra (NYSE: VST), one of the largest competitive power generators in the U.S., has seen its stock surge 530% over the past three years, while the S&P 500 rose only 60%. Let's see why this energy stock crushed the market -- and if it's still worth buying today.

Why did Vistra's stock skyrocket?

Vistra owns a diverse portfolio of natural gas, nuclear, coal, solar, and battery energy storage facilities with a combined capacity of 44 GW -- which is enough to power 22 million homes. It expects its capacity to rise to nearly 50 GW after it closes its acquisition of Cogentrix Energy.

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Vistra owns the second-largest fleet of nuclear power plants in the United States, and it's repurposing its retired coal plants into solar facilities. It expects to achieve net-zero carbon emissions by 2050 through the expansion of its nuclear and solar facilities.

Its retail business -- which includes TXU Energy, Dynegy, Homefield Energy, Ambit, and other brands -- sells electricity to approximately five million residential, commercial, and industrial customers. It provides dozens of renewable energy plans to support its net-zero strategies.

Over the past two years, Vistra expanded its nuclear business by acquiring Energy Harbor and its natural gas business by buying natural gas plants from Lotus Infrastructure Partners. Its pending takeover of Cogentrix will further expand its natural gas business.

From 2021 to 2025, Vistra's revenue and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) grew at CAGRs of 10% and 32%, respectively. That growth was driven by its acquisitions and the rapid expansion of the power-hungry cloud and AI markets. Even as it expanded, it bought back nearly 11% of its shares over the past three years. Its forward yield of 0.6% won't attract any income investors, but its low payout ratio of 41% gives it plenty of room for future dividend hikes.

From 2025 to 2028, analysts expect Vistra's revenue and adjusted EBITDA to grow at CAGRs of 13% and 16%, respectively, as the demand for power outstrips its available supply. Earlier this year, Vistra agreed to provide Meta Platforms with thousands of megawatts of nuclear energy over the next two decades. More hyperscalers will likely follow Meta's lead by entering similar purchasing power agreements.

With an enterprise value of $70 billion, Vistra still looks surprisingly cheap at 10 times this year's adjusted EBITDA. Therefore, if you're looking for a green energy company that will profit from the growth of the cloud, AI, data center, and EV markets, Vistra checks all the right boxes.

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