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

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Clearway Energy	-5.64%	-1.66%	-0.56%
Vistra	13.15%	123.66%	8.66%

Analyst Ratings

This is a breakdown of recent ratings and price targets for Clearway Energy and Vistra, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Clearway Energy	1	0	7	2	3.00
Vistra	1	3	18	1	2.83

Clearway Energy presently has a consensus target price of $42.00, indicating a potential upside of 21.07%. Vistra has a consensus target price of $202.48, indicating a potential upside of 54.57%. Given Vistra’s higher probable upside, analysts plainly believe Vistra is more favorable than Clearway Energy.

Dividends

Clearway Energy pays an annual dividend of $1.90 per share and has a dividend yield of 5.5%. Vistra pays an annual dividend of $0.92 per share and has a dividend yield of 0.7%. Clearway Energy pays out -231.7% of its earnings in the form of a dividend. Vistra pays out 12.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Clearway Energy has increased its dividend for 2 consecutive years and Vistra has increased its dividend for 6 consecutive years. Clearway Energy is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility & Risk

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

Insider and Institutional Ownership

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

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Clearway Energy	$1.67 billion	4.27	$169.00 million	($0.82)	-42.30
Vistra	$20.59 billion	2.14	$944.00 million	$7.40	17.70

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

Summary

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

About Clearway Energy

Clearway Energy, Inc. owns and operates electricity-generation facilities in the United States. Its portfolio includes renewable energy assets, primarily wind and solar, as well as energy storage and conventional power-generation and thermal infrastructure. The company sells electricity and related services to utilities and other customers, often through long-term contractual arrangements. Its facilities are located across multiple U.S. regions. Clearway Energy was formerly known as NRG Yield, Inc. and adopted its current name in 2018.

About Vistra

Vistra Corp. is an integrated energy company that generates and sells electricity and provides related services to residential, commercial and industrial customers. Its retail businesses offer electricity plans and energy services through brands that include TXU Energy and Ambit Energy. The company owns and operates a diverse generation fleet, including natural gas, nuclear, coal and solar facilities, as well as battery energy storage systems. Its operations serve customers and wholesale power markets across multiple U.S. regions, including Texas and the eastern and central United States.