Buying CEG at a Discount? You Are Getting Paid to Do It

At about $330.38 a share, Constellation Energy (CEG) is trading about 18% below its 52W high.

Do you think CEG stock is a good long-term bet at current levels? What about at a 40% discount at about $200 per share? If you think that is a steal, and have some cash ready to go, here is a trade.

8.8% annualized yield at 40% margin of safety, by selling Put Options.

• Sell a long-dated Put option expiring 1/15/2027, with a strike price of $200
• Collect roughly $970 in premium per contract (each contract represents 100 shares)
• That’s about 4.8% annualized yield on the $20,000 you’re setting aside for the possibility of buying the stock
• This cash parked in a savings or money market account will earn an extra 4.0%, taking total yield to 8.8%
• And you give yourself a chance to buy CEG stock at deep discounted price of $200

However, this is not the only stock strategy in town. Trefis High Quality Portfolio is a sophisticated framework designed to reduce stock-specific risk while giving upside exposure.

Possible Trade Outcomes: You Win Either Way

But to hold this trade with conviction, you want to see long term upside in the stock. Because if it comes to it, you want to be excited about buying the stock cheap.

First, you want fundamentals to check out. For details, see Buy or Sell CEG Stock or check Constellation Energy Investment Highlights

Second, you want to better understand competitive advantage and industry tailwinds. Below is what specifically gives us the conviction.

Why Hold CEG Stock Long-Term

Constellation Energy’s position as the largest producer of carbon-free energy in the U.S., primarily through its extensive nuclear fleet, provides a significant competitive advantage in a world increasingly focused on decarbonization and electrification. The demand for reliable, clean energy is a secular trend, further bolstered by the energy needs of AI and data centers. This provides a long-term tailwind for the company. While there are regulatory risks associated with nuclear power, the essential nature of their assets and strong market position make them a critical part of the nation’s energy infrastructure. We are comfortable owning a leader in this critical industry for the long term.

Competitive Advantage

We classify CEG’s economic moat as WIDE, with the primary source being Cost Advantage

• Constellation is the largest producer of carbon-free energy in the U.S., operating the nation’s largest nuclear fleet, which provides a significant scale and cost advantage in producing reliable, 24/7 clean electricity.
• The company has a dominant market share in the commercial and industrial segment, serving as a leading energy supplier to three-fourths of Fortune 100 companies, indicating a strong competitive position.
• While facing lawsuits regarding variable-rate pricing for residential customers, the ability to implement such pricing demonstrates a degree of pricing power, albeit with reputational risk.
• High customer retention rates in key commercial segments suggest a sticky customer base, likely due to the complexity of switching energy providers for large-scale operations and the value of Constellation’s energy management solutions.

See Constellation Energy Full Analysis.

Industry Tailwind

The industry tailwind is STRONG, with CAGR projection of 5.55% – 8.5% (Sources: Fortune Business Insights, Spherical Insights)

Secular Trend: Decarbonization and Electrification (driven by AI data centers and ESG mandates)
Key Risks: Regulatory changes impacting the nuclear industry and potential for technological disruption from new energy storage solutions.

Financial Guardrails

Cash Generation: Positive Free Cash Flow
Balance Sheet: The company has a significant debt load, particularly after the Calpine acquisition, but maintains an investment-grade credit rating. S&P Global Ratings affirmed a ‘BBB+’ rating with a stable outlook in January 2026.

Not comfortable with options or stock-specific trades? PORTFOLIOS are even better.

A Multi Asset Portfolio Beats Picking Stocks Alone

Markets move differently but a mix of assets smooths volatility. A multi asset portfolio keeps you invested and reduces the impact of sharp drops in any single area.

The asset allocation framework of Trefis’ Boston-based, wealth management partner yielded positive returns during the 2008-09 period when the S&P lost more than 40%. Our partner’ strategy now includes Trefis High Quality Portfolio, which has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices