The Smartest Energy Stocks to Buy With $1,000 Right Now

Energy stocks are resilient long-term investments because countries will constantly need more energy to feed their people, support their infrastructure, and power their businesses. But energy stocks are also cyclical -- and they can burn investors who hop aboard at the wrong time.

That said, the energy market's current growth cycle is far from over. According to PowerLines, U.S. utilities could spend $1.4 trillion over the next five years to meet that demand. If that happens, well-run electrification companies like Vistra (NYSE: VST) and Quanta Services (NYSE: PWR) could easily turn a modest $1,000 investment into a few thousand dollars over the long term.

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Vistra

Vistra, the top power generation and retail electricity provider in the United States, owns a wide range of natural gas, nuclear, coal, solar, and battery energy storage facilities. Its retail subsidiaries -- which include TXU Energy, Dynegy, Homefield Energy, Ambit, and other regional leaders -- sell electricity to roughly five million residential, commercial, and industrial customers.

With a combined capacity of 44 GW, Vistra can power up to 22 million homes. By expanding its green energy solutions, it aims to achieve net-zero carbon emissions by 2050.

Over the past few years, Vistra has expanded rapidly by acquiring more nuclear energy and natural gas plants. At the beginning of this year, it secured a 20-year deal to supply Meta Platforms' (NASDAQ: META) data centers with thousands of megawatts of electricity. It will likely secure similar deals with more hyperscalers to support the secular expansion of the power-hungry cloud infrastructure, artificial intelligence (AI), and data center markets.

From 2025 to 2028, analysts expect Vistra's revenue to grow at a 14% CAGR as those tailwinds kick in. They also expect its EPS to grow nearly sixfold (from a depressed baseline in 2025 due to unrealized hedge losses) as its core business grows and it buys back more shares.

That's an incredible growth trajectory for a stock that trades at just 14 times next year's earnings. It pays a forward yield of 0.6%, but its low payout ratio of 41% leaves plenty of room for future dividend hikes. It's already raised its payout for seven consecutive years. So if you're looking for a simple evergreen electrification play, Vistra checks all the right boxes.

Quanta Services

Quanta designs, builds, upgrades, and maintains electric transmission lines, substations, distribution networks, oil and gas pipelines, renewable energy facilities, and data center power systems. It primarily helps utilities and energy companies expand their infrastructure.

Quanta has expanded aggressively by acquiring more than 200 other infrastructure companies across North America and Australia over the past three decades. It generates more than three-quarters of its revenue in the United States. From 2021 to 2025, Quanta's year-end backlog more than doubled from $19.3 billion to $44 billion.

Most of that growth was driven by the expansion of its Electric Power infrastructure business -- which offers grid modernization, renewable interconnection, transmission expansion, and data center electrification services. The rapid expansion of the cloud infrastructure, AI, and data center markets has been generating strong tailwinds for that core business. It's also benefiting from upgrades to aging electrical grids across the United States, as well as the construction of new transmission lines for wind and solar energy.

From 2025 to 2028, analysts expect Quanta's revenue and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to grow at CAGRs of 17% and 19%, respectively. It still looks reasonably valued at 29 times next year's adjusted EBITDA, and its tiny payout ratio of 6% gives it plenty of room to raise its paltry forward yield of 0.06%. Therefore, this oft-overlooked electrification play could still have plenty of upside potential.

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