Company Research | NRG Energy

May 30, 2024by

Today, we’ll talk about NRG Energy (NRG), which has been one of the top growth stocks over the past 3 months.

Over the past three months, NRG Energy shares have risen by +62.9%. At the same time, the utilities sector, to which the company belongs, grew by +19.6%, and the S&P 500 index by +4.6%. As you can see, NRG Energy shares show better returns than the sector average.

NRG Energy is one of the largest producers and suppliers of electricity in the United States. The company has 13 gigawatts of coal and gas-fired generation capacity. The utility segment serves 6 million customers in the United States.

The company operates in the Independent Power and Renewable Electricity Producers industry. It was founded in 2003 and listed on the NYSE in the same year, and in 2010 was included in the S&P 500 index. For the past 2 years, the company has been led by Larry Coben and a team of experienced managers.

The main competitors of NRG Energy are GE Vernova, Vistra and AES. As you can see from the table above, some of them are ahead of the company in terms of capitalization, but it has a number of competitive advantages.

NRG Energy’s strengths are based on the rational use of free capital. It acquired rival Vivint Smart Home for $2.8B in 2023. The company has also repurchased $950M worth of its own shares over the past year and announced a $825M buyback plan for 2024. The company is constantly developing its generating capacity, namely, it has announced the modernization of 3 of its ERCOT stations to add 1.5 gigawatts of additional generating capacity.

The latest report was published by NRG Energy on May 7. 76% of the revenue structure is made up of production costs and 24% of gross revenue. Over the past quarter, the company made a profit of $511M. And its market capitalization is now $17.9B.

*This is not an investment recommendation. It is up to each individual to decide which criteria to favor when making an investment decision, taking into account their goals and individual risk tolerance.
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