InvestBattle | AES vs NRG Energy

December 8, 2023by Anton Tryhubchenko

As we noted in the last week’s issue, over the past three months, one of the top growth industries in the S&P 500 has been Renewable Electricity Producers (+12.9%).

The largest companies in the industry (by market capitalization): AES ($11.5B), which generates and supplies electricity to consumers in 15 countries, and NRG Energy ($10.9B), which serves 7 million customers in the United States.

Based on the latest quarterly reporting data, we analyzed each company’s profitability, strength and efficiency criteria using the methodology of Stanford University professor Joseph Piotroski.

As you can see, from the point of fundamental data assessment, both companies are currently showing rather weak results. Both AES and NRG Energy do not look attractive for medium- and long-term investments.

In addition, over the past 3 months, AES shares have risen by +1.1% and NRG Energy by +28.8% (the S&P 500 index has risen by +2.7%). Therefore, we can see that NRG Energy not only outperformed its closest competitor, but also demonstrated better results compared to the index.

So, there is no single winner in today’s battle. Therefore, it is up to each individual to decide which criteria to give preference to when making an investment decision, taking into account their goals and individual risk tolerance.
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