Seven out of the top 10 best-performing S&P 500 stocks over the past year belonged to the tech sector. There are no prizes for guessing that Nvidia Corp. NVDA and Super Micro Computer, Inc. SMCI are part of the elite list but what could catch most by surprise is a non-tech company topping the list.
Leading S&P 500 Leaderboard: Irving, Texas-based utility company Vistra Corp. VST has gained over 250% over the past year and is the best-performing S&P 500 company in terms of returns.
Artificial Intelligence stalwart Nvidia, which is riding on the momentum set in motion by the technology, and AI server manufacturer Super Micro took the second and third positions, respectively, with gains of 239% and 203%, respectively.
The buoyancy continued this year. So far in 2024, Vistra, a relatively new addition to the S&P 500 Index, added 138%, although underperforming Super Micro (+197%) and Nvidia (+159%).
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Not Cramer’s Favorite: Despite its outperformance, Vistra has not cut ice with CNBC Mad Money host Jim Cramer. In the Lightning Round segment of his show on CNBC that was aired in mid-June, he said that Vistra is a momentum stock.
“Momentum stocks can't really withstand that kind of drop,” he said, referring to the pullback seen in the stock from a high of $107.24 reached on May 28.
That said, the stock picker does see some positives “I do think that it's the sweet spot of the energy, energy market,” he said, adding that he preferred Constellation Energy Corporation CEG over Vistra.
A week later, while reviewing the S&P 500 Index’s performance for the first half and stocks that contributed to the upside, Cramer was slightly more optimistic. Vistra’s upside was due to the enormous power requirement of all new data centers that are currently being built, he said.
He added that the company is unique as it has several nuclear power plants, which are currently the only way to get reliable clean energy at scale.
Outlook: Vistra is an integrated retail electricity and power generation company providing power to customers, businesses, and communities from California to Maine. This Fortune 500 company serves 20 states and the District of Columbia.
Vistra is also one of the largest competitive power generators in the U.S., with a capacity of approximately 37,000 megawatts powered by a diverse portfolio of natural gas, nuclear, solar, and battery energy storage facilities.
Vistra also owns and operates the 750-MW/3,000-MWh energy storage system in Moss Landing, California.
The company’s first-quarter results released in early May showed that ongoing operations adjusted EBITDA came in at $813 million, nearly 50% year-over-year improvement. As Cramer suggested, the data center opportunity could have an augmenting effect on the top line.
The average analysts’ price target for Vistra, according to data compiled by TipRanks, is $108.17, and this suggests scope for about 18% upside.
The Texan company is a regular dividend payer, with the most recent quarterly dividend amounting to 21.75 cents.
Vistra closed Wednesday’s session up 4.58% at $91.72, according to Benzinga Pro data
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