CEG Stock Underperforms Industry in the Past Week: How to Play?

Constellation Energy Corporation’s CEG shares have lost 3.7% over the past seven days compared with the Zacks Alternate Energy – Other industry’s decline of 1.9%. The company’s stock declined over the past few days following a leak of a non-radiological chemical from a holding tank during a scheduled refueling and maintenance outage. After the incident, 18 workers were taken to a local hospital for treatment. The Nuclear Regulatory Commission (“NRC”) confirmed that the chemical involved is not regulated by the agency.The company stands to benefit from growing data center demand, supported by its nuclear fleet, which delivers reliable and uninterrupted clean power to customers.

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Another stock, Vistra Corp. VST, has multi-fuel power generation capabilities, with a significant volume of electricity production coming from nuclear power plants. Vistra’s shares also declined 1.5% in the past seven days.Given the current underperformance in price, should you consider adding Constellation Energy to your portfolio? Let's examine the factors in detail and assess the investment prospects.

Constellation Energy is capitalizing on the growing demand for clean energy through the diversified portfolio, led by its extensive nuclear fleet. With a strong emphasis on zero-carbon power generation, the company’s nuclear assets highlight its leadership in reliability and sustainability, achieving an impressive 93.1% capacity factor in the fourth quarter of 2025.Constellation Energy’s ability to produce a large volume of clean electricity has attracted the big-tech companies, who have entered into long-term power supply agreements with Constellation Energy. The company has signed deals with Microsoft, Meta and CyrusOne, which will boost its long-term prospects. The completion of the Calpine Corporation acquisition strengthens the growth prospects of Constellation Energy by expanding its presence in competitive power markets and adding efficient gas-fired assets. The deal enhances earnings diversification, improves cash flow stability and increases operational flexibility. This also complements the company’s nuclear-led clean energy platform, positioning it to benefit from rising power demand and growing grid reliability needs.Constellation Energy’s earnings growth is supported by its strategic investments and commitment to expanding the clean energy generation portfolio. The company plans to invest about $5.7 billion in 2026 and $4.7 billion in 2027, with roughly 29% allocated to nuclear fuel acquisition to ensure reliable, clean power generation.

The Zacks Consensus Estimate for 2026 and 2027 earnings per share (EPS) indicates year-over-year growth of 23.86% and 11.45%, respectively. CEG’s long-term (three to five years) earnings growth rate is 15.42%.

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The Zacks Consensus Estimate for 2026 and 2027 earnings per share (EPS) for Vistra implies year-over-year growth of 67.11% and 27.31%, respectively. VST’s long-term earnings growth rate is 18.89%.

Constellation Energy’s trailing 12-month return on equity of 20.77% is better than the industry’s average of 7.04%. Return on equity, a profitability measure, reflects how effectively a company utilizes its shareholders’ funds to generate income.

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Another firm, Duke Energy Corporation DUK, also produces a large volume of clean energy from its nuclear units. Duke Energy’s ROE is currently pegged at 9.67%, lower than its industry level.

Constellation Energy continues to make share repurchases. It has repurchased shares to raise shareholders’ value. Constellation Energy’s board of directors approved a 10% increase in the quarterly dividend rate to 42.65 cents from 38.78 cents per share. The company increased its dividend by 150% in the first two years. It targets dividend growth of 10% annually in future years. Constellation Energy’s annualized dividend is $1.71 per share.Since 2023, CEG’s board of directors has authorized the repurchase of up to $3 billion of its outstanding common stock. As of Dec. 31, 2025, there was $593 million of remaining authority to repurchase shares of the company's outstanding common stock. Check CEG’s dividend history here.Duke Energy has a very long history of dividend payment and has been paying dividends to its shareholders for 100 consecutive years. The current dividend yield of the company is 3.20%, better than its industry’s yield of 2.68%.

Constellation Energy is currently trading at a premium compared with its industry on a forward 12-month P/E basis. CEG is trading at P/FF12M of 25.67X compared with its industry’s 22.06X.

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Constellation Energy is directing a portion of its capital expenditures toward the acquisition of nuclear fuel, including additional purchases to build inventory levels. The company is also strategically positioning itself to meet the rising energy demand from data centers, particularly those supporting the AI industry. The long-term power supply agreement signed by the company will also secure its earnings. ROE of the company is better than its industry.The chemical leak from a nuclear unit is a reminder that nuclear operations are risky even if proper security measures are taken to run its operation. Investors can hold onto this Zacks Rank #3 (Hold) stock at present and continue to enjoy the benefits of regular dividends. Given its premium valuation, new investors may want to wait for a better entry point.You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Constellation Energy Corporation (CEG) : Free Stock Analysis Report

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This article originally published on Zacks Investment Research (zacks.com).

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