We are reaffirming our $43 per share fair value estimate for NRG Energy after Texas regulators announced that it is a finalist to receive a state-backed loan to help finance new natural gas generation as part of the $5 billion Texas Energy Fund program. We are also reaffirming our no-moat rating and High Morningstar Uncertainty Rating.
NRG's transformation in 2017-20 cut the business in half, improved its credit metrics, and generated substantial cash to use for the dividend, stock buybacks, and acquisitions like Direct Energy and Vivint.
Federal and state environmental regulations and renewable energy goals could erode profitability at NRG's fossil fuel power plants.
|
Metric
|
NRG
|
VST
|
AES
|
|---|---|---|---|
Price/Earnings (Normalized) | 20.73 | 38.32 | 8.98 |
Price/Book Value | 6.46 | 13.89 | 4.57 |
Price/Sales | 0.71 | 3.23 | 1.14 |
Price/Cash Flow | 7.36 | 10.27 | 4.99 |
|
Metric
|
NRG
|
VST
|
AES
|
|---|---|---|---|
Quick Ratio | 0.46 | 0.37 | 0.34 |
Current Ratio | 1.18 | 0.98 | 0.97 |
Interest Coverage | 5.11 | 2.40 | 0.68 |
|
Metric
|
NRG
|
VST
|
AES
|
|---|---|---|---|
Return on Assets (Normalized) | 4.94% | 2.27% | 4.17% |
Return on Equity (Normalized) | 49.29% | 24.51% | 83.30% |
Return on Invested Capital (Normalized) | 12.41% | 5.89% | 7.76% |
|
1-Day Chart
|
Name
|
Price
|
Morningstar Rating for Stocks
|
Capital Allocation
|
Economic Moat
|
Market Cap
|
|---|---|---|---|---|---|---|
| Vistra Corp
VST
| Syrrcvjwz | Dpcn | $43.1 Bil | |||
| Uniper SE
UNPRF
| — | Gnvfz | $25.0 Bil | |||
| Huaneng Power International Inc Class H
HUNGF
| — | Wlq | $15.0 Bil | |||
| Power Assets Holdings Ltd ADR
HGKGY
| — | Wdp | $13.5 Bil | |||
| Power Assets Holdings Ltd
HGKGF
| — | Gfq | $13.5 Bil | |||
| China Resources Power Holdings Co Ltd ADR
CRPJY
| Xvxqzvhn | Rxb | $13.1 Bil | |||
| China Resources Power Holdings Co Ltd
CRPJF
| — | Kykqq | $13.1 Bil | |||
| Talen Energy Corp Ordinary Shares New
TLN
| — | Gfppd | $9.0 Bil | |||
| Centrica PLC ADR
CPYYY
| Spcnknw | Vmyh | $8.0 Bil |
:quality(80)/author-service-images-prod-us-east-1.publishing.aws.arc.pub/morningstar/ea0fcfae-4dcd-4aff-b606-7b0799c93519.jpg)
United States