NRG Energy

Methodology

NRG's competitive power generation and retail electricity business creates earnings volatility from power prices, weather, and hedging strategies. Unlike regulated utilities, merchant generation faces commodity price risk. Use normalized earnings across power price cycles and focus on retail customer contribution rather than wholesale generation exposure for sustainable earnings assessment.

Methodology

PEG analysis is challenging for NRG given earnings volatility from power market conditions and retail margin fluctuations. Growth rates swing with hedging gains/losses and power price environments. Independent power producers are better valued using EV/EBITDA and cash flow metrics rather than earnings-based growth approaches given commodity exposure.

Methodology

NRG offers an attractive dividend with aggressive capital return policies during profitable periods, though sustainability depends on power market conditions. The dividend adds meaningful value when generation margins are favorable. For merchant power companies, dividend sustainability through commodity cycles matters more than traditional growth metrics in assessing shareholder returns.