Contrasting Clearway Energy (NYSE:CWEN) and Vistra (NYSE:VST)

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

Volatility & Risk

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

Analyst Ratings

This is a summary of recent ratings and recommmendations for Vistra and Clearway Energy, as reported 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 currently has a consensus price target of $205.00, suggesting a potential upside of 63.91%. Clearway Energy has a consensus price target of $42.00, suggesting a potential upside of 23.37%. Given Vistra’s higher probable upside, analysts clearly believe Vistra is more favorable than Clearway Energy.

Insider & Institutional Ownership

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

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 raised its dividend for 6 consecutive years and Clearway Energy has raised its dividend for 2 consecutive years.

Earnings & Valuation

This table compares Vistra and Clearway Energy”s revenue, earnings per share (EPS) 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.

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%

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.