Do You Like Cash? Consider Vistra Stock
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Vistra (VST) generated free cash flow equal to 5.8% of its market value over the last twelve months, compared with 4.2% for the median S&P 500 company. Shareholders own a stake in that cash whether the company pays it out or not. Such a high yield usually indicates a business on sale or one the market expects to shrink. Which one is Vistra?
Vistra’s Sales, Margin And Cash All Rose
Over the twelve months to September 30, 2026, Vistra looks like a business on sale. Its free cash flow rose to $2.61 billion from $1.65 billion a year earlier. When the market recognises cash like that, the price tends to follow, more so when the cash is growing. Vistra’s stock has not followed: its total return over the past year was -28.7%, against 12.8% for the S&P 500.
The company operates a fleet of power plants and a Retail business. Revenue climbed 19.8% to $20.6 billion, and its operating margin expanded to 22.6%, compared with 12.2% a year earlier. Capital spending consumed 54.8% of the cash generated by operations.
Free cash flow remained positive in each of the 13 twelve-month periods from September 2023 to September 2026. The cash generation was uneven, however, falling from $3.31 billion in the twelve months to September 2023 to $1.32 billion in the period to December 2025.
Lenders have a claim on a portion of that cash before it reaches shareholders, as Vistra carries net debt equal to 41.1% of its market value.
Where Is Vistra’s Business Under Pressure?
Vistra faces pressure in Texas. During a November 6, 2026 call, management noted that power prices in ERCOT have trended lower, while PJM, its other core market, has seen higher forward prices. The Texas fleet accounts for just under 40% of Vistra’s generation earnings, management said.
Management attributed the lower prices to crypto mining facilities going offline to convert into data centers, along with a pause in data center audits and permits. Executives said they do not see a long-term impact. The company still expects load growth of 4% to 6% in ERCOT through 2030.
The exposure grows with time. Vistra has hedged 98% of its expected generation for 2027, but that figure drops to 78% for 2028. Management noted the company is much less hedged than that in ERCOT.
Management has not lowered its guidance. On November 6, executives raised the midpoint of their 2026 guidance for adjusted free cash flow before growth, a proprietary cash measure, to $4.5 billion from about $4.3 billion in August. That company measure is calculated differently from the $2.61 billion of free cash flow above.
How Much Debt Is Vistra Carrying?
Total debt reached $21.1 billion at September 30, 2026, up from $17.5 billion a year earlier. The company closed its Cogentrix acquisition on October 30, adding natural gas plants for a net price of about $4 billion. That deal closed after September 30, so it is not in the $21.1 billion figure. Vistra paid for part of the deal in shares.
Operating income covered interest expense 4.8 times over the last twelve months. Counting the acquisition and the redemption of its preferred stock with money from new junior notes, management estimated net debt at about 2.8 times adjusted EBITDA, and expects that ratio to keep falling.
For Vistra shareholders, the open questions are whether free cash flow continues to climb and whether debt falls against earnings, as management expects. The company will update both measures when it reports its fourth quarter of 2026, expected in February 2027.
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