We recently compiled a list of the 10 Best Non-Tech Stocks to Buy Now for Long Term. In this article, we are going to take a look at where Vistra Corp. (NYSE:VST) stands against the other non-tech stocks.
Investing in non-technology stocks offers a range of benefits that can enhance an investor’s portfolio, providing diversification, stability, and exposure to sectors with strong growth potential. While technology companies have often dominated headlines with rapid growth, non-tech sectors have demonstrated robust performance and present compelling opportunities for investors. Diversification is a fundamental principle in investment strategy, aiming to reduce exposure to any single asset or sector. By allocating capital across various industries, investors can mitigate the impact of a downturn in any one area. Non-tech stocks, encompassing sectors such as finance, healthcare, consumer goods, and energy, often exhibit different performance cycles compared to technology stocks. This lack of perfect correlation means that when tech stocks experience volatility, non-tech stocks may remain stable or even appreciate, thereby balancing the overall portfolio risk.
Read more about these developments by accessing 10 Best AI Data Center Stocks and 10 Buzzing AI Stocks According to Goldman Sachs.
As noted in financial literature, a diversified portfolio can have less variance than the weighted average variance of its constituent assets, reducing overall volatility. Recent market data from Fidelity underscores the strong performance of non-tech sectors. Over the past 12 months, large-cap financial stocks have returned an average of 33.7%, outperforming the information technology sector’s 28.1% return during the same period. Year-to-date figures further highlight this trend, with financial stocks within the S&P 500 up 7%, while IT stocks have returned just 1.6%. Within the financial sector, consumer finance stocks have performed exceptionally well, up 54.8%, and banks follow closely with an average return of 51.3%.
Economic policies, particularly deregulation initiatives, have significantly influenced the performance of non-tech sectors. For instance, recent deregulation efforts have been identified as a key bullish theme for the stock market, with financials, consumer goods, commodities, transport, and capital goods sectors benefiting the most. Financial stocks have shown promising year-to-date returns of 7%, outperforming the technology sector’s 3% gain. Investors seeking diversification beyond the US market may find attractive opportunities in non-tech sectors globally. For example, Japanese companies have demonstrated robust corporate earnings growth, with firms like Hitachi, Sony, and Toyota simplifying their structures and focusing on core businesses. These companies have also enhanced shareholder returns through dividends and stock repurchases.
Read more about these developments by accessing 30 Most Important AI Stocks According to BlackRock and Beyond the Tech Giants: 35 Non-Tech AI Opportunities.
For this article, we made a list of non-tech stocks with impressive growth profiles and strong fundamentals. The companies listed below offer a healthy mix of value and growth for investors. These stocks are also popular among hedge funds. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Solar panel workers installing a new farm for clean energy generation.
Vistra Corp. (NYSE:VST)
Number of Hedge Fund Holders: 120
Vistra Corp. (NYSE:VST) operates as an integrated retail electricity and power generation company. The company reported GAAP net income of $1,837 million and cash flow from operations of $1,702 million in the third quarter of 2024. The firm is in early talks with major data center developers to upgrade its nuclear plants, including the Comanche Peak facility in Texas, to boost power output. The company is also discussing building new natural gas plants in Texas and the PJM grid (Pennsylvania and Ohio) to support data center projects, according to Chief Strategy and Sustainability Officer Stacey Dore.
Overall VST ranks 2nd on our list of the best non-tech stocks to buy now for long term. While we acknowledge the potential of VST as an investment, our conviction lies in the belief that some stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a 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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Disclosure: None. This article is originally published at Insider Monkey.
