NRG Energy, Inc. (NRG) vs Talen Energy Corporation (TLN)

NRG Energy, Inc. and Talen Energy Corporation are both Utilities Independent Power Producers companies. NRG Energy, Inc. is the larger, with a market value of $20.7B against $14.8B — 1.4× the size. Talen Energy Corporation has negative trailing earnings, so its P/E is not meaningful; NRG Energy, Inc. trades at 26.4×. Talen Energy Corporation grew revenue faster over the last twelve months: 60.8% against 12.8%. NRG Energy, Inc. has the higher net margin (2.36% vs −5.38%) and the higher return on invested capital (4.54% vs 0.50%). Across the 19 metrics below, NRG Energy, Inc. leads on 14 and Talen Energy Corporation on 5.

Valuation

Metric NRG TLN Utilities Independent Power Producers median
P/E 26.41 n/m 25.63
P/S 0.64 4.07 2.78
P/B 5.04 8.53 3.29
Price to free cash flow 57.86 31.47 —
EV/EBITDA 11.05 48.26 13.69
EV/Sales 1.33 6.78 3.62
Earnings yield 3.79% (1.33%) 2.03%
Free cash flow yield 1.73% 3.18% (1.89%)

Profitability

Metric NRG TLN Utilities Independent Power Producers median
Gross margin 18.80% 53.86% 37.99%
Operating margin 6.08% 2.56% 4.83%
Net margin 2.36% (5.38%) 1.18%
Free cash flow margin 1.10% 12.92% 0.50%
Return on equity 26.77% (12.82%) 1.70%
Return on assets 2.44% (1.77%) 0.93%
Return on invested capital 4.54% 0.50% 2.93%

Growth

Metric NRG TLN Utilities Independent Power Producers median
Revenue growth (TTM) 12.80% 60.83% 12.80%
EPS growth (last fiscal year) (19.64%) (127.11%) —
Revenue growth, 5-year CAGR 27.56% — 15.82%
Net income growth, 5-year CAGR 9.34% — 1.71%

Health

Metric NRG TLN Utilities Independent Power Producers median
Debt to equity 4.79 5.84 0.74
Current ratio 0.97 0.78 1.21
Net debt to EBITDA 3.21 21.19 3.88

Dividend

Metric NRG TLN Utilities Independent Power Producers median
Dividend yield 2.92% — —
Payout ratio 0.17 — 0.17

Size

Metric NRG TLN Utilities Independent Power Producers median
Market cap 20.66b 14.81b 11.01b

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