1. Vistra Corp. (NYSE:VST)
Year-to-Date Return as of December 25: 276.5%
Vistra Corp. (NYSE:VST) is a Texas-based electricity and power generation company. The company experienced a major boost in early 2024 through its acquisition of Energy Harbor for $3.43 billion. This deal provided the company with four nuclear power plants and the second-largest energy storage capacity in the US, totaling 1,020 megawatts (MW). The strategic timing of this acquisition positioned Vistra to capitalize on the growing interest in generative artificial intelligence. The stock has delivered a 276.5% return in 2024 so far, which makes it one of the best performing dividend stocks in 2024.
Carillon Tower Advisers highlighted this performance in its Q3 2024 investor letter:
“Vistra Vistra Corp. (NYSE:VST) is an integrated retail electricity and power generation company. As an independent power producer (IPP), Vistra primarily generates revenue from selling its generated power at the prevailing market price. As a result of recent growth in future power demand, the company’s shares have soared on investors’ expectations for future power prices. The potential for Vistra to announce future power purchase agreements (PPAs) with large technology companies in order to satisfy the extraordinary power requirements of these companies’ artificial intelligence (AI) endeavors, in a similar manner to some of Vistra’s closest IPP peers, has also provided a tailwind for the stock.”
In the third quarter of 2024, Vistra Corp. (NYSE:VST) reported revenue of $6.3 billion, which grew significantly by 54% from the same period last year. The company announced the upcoming acquisition of a 15% minority interest in Vistra Vision for a net present value cash purchase price of approximately $3.1 billion. This acquisition will increase shareholders’ ownership of the company’s zero-carbon nuclear, energy storage, and solar generation assets, as well as its high-performing retail business. The transaction simplifies the company’s overall structure at an appealing valuation, significantly surpassing the mid-teens levered returns threshold, while still allowing the company to focus on its capital allocation priorities and investments in core markets.
In the first nine months of 2024, Vistra Corp. (NYSE:VST) generated $3.2 billion in operating cash flow. In addition, the company ended the quarter with $905 million available in cash and cash equivalents. This strong cash position allowed the company to grow its payouts for 12 consecutive years. It offers a quarterly dividend of $0.2215 per share, having raised it by 0.9% in October this year. The stock supports a dividend yield of 0.61%, as of December 25.
The hedge funds tracked by Insider Monkey in Q3 2024 presented a bullish stance on Vistra Corp. (NYSE:VST) with 97 funds investing in the company at the end of the quarter, up from 92 in the previous quarter. The stakes held by these hedge funds have a collective value of nearly $5 billion.
Overall, Vistra Corp. (NYSE:VST) ranks first on our list of the best performing dividend stocks in 2024. While we acknowledge the potential for VST to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than VST but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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