6. Talen Energy Corporation (NASDAQ:TLN)
Number of Billionaire Holders: 12
Next on our list of the Best Nuclear Power Stocks is Talen Energy Corporation (NASDAQ:TLN), a leading independent power producer and energy infrastructure company with 10.7 GW of generation assets, including 2.2 GW of nuclear power.
Talen Energy Corporation (NASDAQ:TLN) reported a strong performance in Q4 2024, posting an EPS of $0.47, significantly above analysts’ estimates by $0.67. The company’s revenue of $467 million also topped expectations by $33.1 million, despite being down 11.39% YoY. TLN maintains a robust balance sheet, with approximately $1.2 billion of liquidity, including over $470 million in cash. The company also generated an adjusted free cash flow of $283 million in FY 2024, exceeding its guidance midpoint.
Talen Energy Corporation (NASDAQ:TLN) remains committed to its shareholders, with a target to return 70% of its adjusted free cash flow. The company repurchased $2 billion worth of its stock in 2024, equal to 22% of its total outstanding shares. Moreover, it still has $1.1 billion of remaining share repurchase program capacity through year-end 2026.
River Road Asset Management stated the following regarding Talen Energy Corporation (NASDAQ:TLN) in its Q4 2024 investor letter:
“Another top contributor was Talen Energy Corporation (NASDAQ:TLN), a leading independent power producer. TLN boasts a diverse 10.7 GW generation portfolio spanning nuclear (48%), natural gas (41%), and coal (11%) assets across the PJM (northeastern states) and WECC (western regions). The electrical grid faces mounting pressure from rapidly escalating demand, fueled by transformative technologies like artificial intelligence (AI). Consequently, the price of clean and reliable nuclear power is expected to increase significantly. TLN’s crown jewel, the Susquehanna nuclear facility, enjoys dual advantages: a tax credit safeguarding its cash flow downside and upside cash flow potential as power prices respond to new agreements. These benefits are exemplified by TLN’s recent contract with Amazon® and Constellation Energy Group’s (CEG) plans to reactivate Three Mile Island to meet Microsoft’s® demand.
This strategic positioning drove several powerful catalysts in the quarter despite the Federal Energy Regulatory Commission’s (FERC’s) rejection of the ISA amendment for increased Amazon Web Services (AWS) power capacity. The company demonstrated strong shareholder commitment by executing an additional $1B buyback, bringing total repurchases to 20% of shares in 2024, with $1.0B still authorized through 2026. The stock benefited from substantial passive fund demand, with over six million shares acquired in September alone following inclusion in five equity indices. Most importantly, the underlying business fundamentals remained robust, with expanded spark spreads driving increased generation margins across the fleet, while maintaining a conservative leverage ratio of 2.4x, well below the 3.5x target. The market particularly responded to the growing narrative around data center power demand, which is expected to surge from 25 gigawatts in 2024 to more than 80 gigawatts by 2030, positioning Talen’s existing generation capacity as increasingly valuable in a market facing significant supply constraints. We trimmed the position as it approached its assessed value.”
