Key Points
Constellation Energy is the largest producer of carbon-free electricity in the U.S.
Vistra recently signed a long-term deal with Meta Platforms.
Both stocks are down to start 2026.
- 10 stocks we like better than Constellation Energy ›
Utilities used to be boring, defensive investments, but with the rise of AI-related demand, that is no longer the case. Data centers and industrial electrification are changing how investors view utility stocks. Two major players that are very much in the mix are Constellation Energy (NASDAQ: CEG) and Vistra (NYSE: VST). One company offers greater stability, whereas the other could potentially have more upside. Which stock is better, though? Let's dive in and find out.
Constellation is carbon-free and predictable
Constellation Energy is the largest producer of carbon-free electricity in the U.S. Its biggest revenue drivers are its long-term power contracts and the rising demand for clean energy, particularly for use in data centers.
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Constellation Energy has a steady cash flow and a diversified portfolio including nuclear, natural gas, and renewable energy. Last quarter, Constellation's earnings were mixed. Constellation brought in $930 million in net income, which was a decrease from the same quarter last year. However, adjusted operating earnings improved from $860 million in the third quarter of 2024 to $952 million in 2025.
Constellation's stock is down substantially to start 2026, having declined more than 23% as of Feb. 9. Overall, the power company continues to provide long-term predictability, but could use a bit more operational efficiency to improve profitability metrics. For income investors, Constellation pays a consistent annual dividend of $1.55 per share.
Vistra is volatile but ambitious
Vistra is a bit more diversified and opportunistic in its operations. The Texas-based power company offers natural gas, nuclear, and renewable assets, but also has exposure in merchant power markets. This broader portfolio gives Vistra greater flexibility in electricity pricing.
Vistra also has a long-term nuclear agreement with Meta (NASDAQ: META) that has investors excited. Still, the stock is down slightly year to date. Vistra's stock is currently trading at a reasonable forward P/E ratio of 15.5 as of Feb. 9.
Vistra is a bit more volatile than Constellation; its beta is 1.44 compared to Constellation's 1.14. The company's higher volatility is the price investors pay for increased growth prospects. The company has also completed $5.6 billion in share repurchases since 2021 and recently authorized another $1 billion. This refreshed buyback policy is a bullish signal for long-term investors.
Which stock is better?
Unfortunately, there isn't a clear winner in this case, but investors can pick which stock is better for their portfolio based on personal goals. Are you looking for stability and cash flow? Constellation Energy is a great option with a solid dividend. However, if you can withstand a bit more volatility and are seeking additional upside in the power generation market, I'd lean toward Vistra as the preferred long-term choice.
Should you buy stock in Constellation Energy right now?
Before you buy stock in Constellation Energy, consider this:
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Catie Hogan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Constellation Energy and Meta Platforms. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
