10 Best-Performing S&P 500 Stocks in the Last 3 Years

3. Vistra Corp (NYSE:VST)

3Y CAGR: 90.4%

Vistra is a well-known integrated retail electricity and power generation company out of Irving, TX. The company’s power generation fleet totals to around 41,000 MWs of gas, coal, nuclear, and solar facilities. Vistra’s merger with Dynegy created the lowest-cost integrated power company in the industry due to the former’s integrated ERCOT model and the latter’s generation capacity and retail footprint.

Vistra’s retail segment, which operates under brands like TXU Energy, also provide stability and consistent cash flows. Retail operations are less volatile compared to the wholesale power market, allowing Vistra to benefit from steady revenues.

The company also completed its acquisiton of Energy Harbor in March, making Vistra the second largest carbon-free, nuclear-electricity provider behind Constellation Energy. The company is now well-positioned to capitalize on tech companies looking for carbon-free power for their data centers and large AI models. Vistra has gained 244.5% so far this year, becoming the best-performing S&P500 stock year-to-date.

This is what Meridien Hedged Equity Fund had to say about the company in their Q1, 2024 investor letter:

“Vistra Corp. (NYSE:VST) was a top performer in the strategy over the past quarter, with its shares rallying over 80%. A key driver has been the thesis that the projected growth of power-hungry data centers, spurred by the rise of generative AI, will increase electricity demand and power prices. This is expected to significantly benefit incumbent power generators like Vistra. The company’s efficient generation portfolio, especially its nuclear and natural gas plants, is well-positioned to capitalize on rising demand, scarcity pricing, and ancillary services in the Texas power market. Vistra is also pursuing opportunities to potentially sign high-margin power offtake agreements directly with data center customers for its nuclear plants, similar to a recent deal by peer Talen Energy and Amazon. We continue to like Vistra’s strong free cash flow generation supporting continued share buybacks and debt reduction, synergies from the recent Energy Harbor acquisition, and a favorable power market backdrop with rising spark spreads. We trimmed the stock following its strong performance during the period.”