Right, so, Constellation Energy (CEG 2.40%). Let’s talk about it. The stock’s had a bit of a wobble, hasn’t it? Down in the low $300s as of mid-January. Which, frankly, feels…optimistic. I mean, it was flirting with $400 not that long ago. The market, as always, is having a laugh. A very expensive laugh, if you happen to be holding the shares. I’ve been watching this one, and honestly, it’s less a utility stock and more a mood swing wrapped in a power plant.
A Volatile History, Briefly
Let’s be honest, this surge last year? It was all hype. The AI boom, everyone suddenly needing more power…it’s a good story, and the market loves a good story. But stories don’t pay dividends, do they? And they definitely don’t guarantee stability. Constellation got swept up in it, and investors…well, they got a little carried away. It’s the same old pattern: irrational exuberance, followed by a slightly panicked correction. I’ve seen it a hundred times. It’s exhausting, really.
It’s behaving more like a tech stock than a dependable utility. Which, historically, is a bit of a red flag. Income investors, the sensible types who like a bit of predictability, are probably wishing they’d stuck to something…less dramatic. Though, to be fair, predictability is overrated. It’s boring. But boring usually means you don’t wake up in a cold sweat wondering if you’ve made a terrible mistake.
The dividend is creeping upwards, which is…something. $1.55 per share last year. Not exactly a life-changing amount, mind you. A yield of around 0.5%. But it’s a start. And if they can actually capitalize on all this AI-fueled demand, it could grow. Assuming, of course, that the AI revolution doesn’t turn out to be another overblown tech bubble. Which, let’s be real, is entirely possible.
They just acquired Calpine Corporation. Supposedly adds about $2 billion in free cash flow. That sounds impressive, doesn’t it? Until you remember that “free cash flow” is a lovely phrase accountants use to make things sound better than they are. Still, no debt on the balance sheet is…nice. It’s like finding a twenty in an old coat pocket. Unexpected, and always appreciated.
And then there’s the nuclear angle. Apparently, Jensen Huang – the man who knows things about AI – has given nuclear power a thumbs-up. Which, from a historical perspective, is…interesting. Nuclear has always been a bit of a fraught topic, hasn’t it? But suddenly, it’s the solution to all our problems? Convenient. Constellation operates the largest U.S. nuclear fleet, so that’s a win for them. Though, I suspect, it’s also a win for a lot of other people who are suddenly very enthusiastic about nuclear power.
Still a Bit Rich for My Taste
The forward P/E ratio is…ambitious. 27. Compared to NextEra Energy (21) and Vistra (17), it’s practically showing off. Constellation’s earnings per share are the highest, admittedly. But a high P/E ratio just means people are expecting a lot. And expectations, as anyone who’s ever ordered a soufflé knows, are a dangerous thing.
Expensive relative to its peers, modest dividend…it’s a bit of a puzzle, isn’t it? I still think the low $300s is a bit steep. If it dips into the mid-$200s, then we might be having a conversation. Until then, I’m perfectly happy watching from the sidelines. I’ve made enough questionable investment decisions in my life, thank you very much.
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2026-01-23 08:52