Analyzing NRG Energy’s Current Valuation

Valuation

Currently, NRG Energy (NRG) stock is trading at an EV-to-EBITDA multiple of 11x—equal to its five-year historical average. The stock appears to be trading at a fair valuation. In comparison, AES (AES), one of the smallest constituents of the Utilities Select Sector SPDR ETF (XLU), is trading at a valuation of 8.6—higher than its historical average of ~8x. SCANA’s (SCG) EV-to-EBITDA multiple is 8.6x—lower than its historical average of 10.0x.

Analyzing NRG Energy’s Current Valuation

The above chart compares NRG Energy’s stock movement with broader utilities (XLU) and markets. NRG Energy stock stayed relatively strong compared to utilities. The Utilities Select Sector SPDR ETF (XLU) has fallen more than 4% in the past week as benchmark Treasury yields strengthened. NRG Energy was relatively flat during this period.

NextEra Energy (NEE), Duke Energy (DUK), Southern Company (SO), and Dominion Energy (D) are the top utilities in the country by market capitalization. To learn more, read How the Big Utilities Are Placed for the Future.