Vistra (NYSE:VST) versus RWE (OTCMKTS:RWEOY) Critical Survey

Vistra (NYSE:VST) and RWE (OTCMKTS:RWEOY) are both large-cap utilities companies, but which is the better stock? We will compare the two businesses based on the strength of their analyst recommendations, dividends, institutional ownership, earnings, profitability, risk and valuation.

Analyst Ratings

This is a summary of recent recommendations for Vistra and RWE, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Vistra	0	1	13	3	3.12
RWE	0	5	2	0	2.29

Vistra currently has a consensus price target of $229.88, indicating a potential upside of 54.81%. RWE has a consensus price target of $53.30, indicating a potential downside of 19.21%. Given Vistra’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Vistra is more favorable than RWE.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Vistra	11.52%	105.64%	7.22%
RWE	15.16%	4.77%	1.83%

Dividends

Vistra pays an annual dividend of $0.92 per share and has a dividend yield of 0.6%. RWE pays an annual dividend of $1.00 per share and has a dividend yield of 1.5%. Vistra pays out 15.4% of its earnings in the form of a dividend. RWE pays out 26.4% 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. Vistra has increased its dividend for 6 consecutive years.

Valuation & Earnings

This table compares Vistra and RWE”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Vistra	$17.74 billion	2.82	$944.00 million	$5.97	24.87
RWE	$19.94 billion	2.40	$3.54 billion	$3.79	17.41

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

Institutional and Insider Ownership

90.9% of Vistra shares are held by institutional investors. 0.9% of Vistra shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Risk and Volatility

Vistra has a beta of 1.4, indicating that its share price is 40% more volatile than the S&P 500. Comparatively, RWE has a beta of 0.62, indicating that its share price is 38% less volatile than the S&P 500.

Summary

Vistra beats RWE on 14 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 RWE

RWE Aktiengesellschaft generates and supplies electricity from renewable and conventional sources in Germany, the United Kingdom, rest of Europe, North America, and internationally. It operates through five segments: Offshore Wind; Onshore Wind/Solar; Hydro/Biomass/Gas; Supply & Trading; and Coal/Nuclear. The company generates wind, hydro, solar, nuclear, gas, and biomass electricity. It also trades in electricity, gas, and energy commodities; operates gas storage facilities; and engages in battery storage activities. The company serves commercial, industrial, and corporate customers. RWE Aktiengesellschaft was founded in 1898 and is headquartered in Essen, Germany.