Buffett Brain · Research note
Score updated 29 Oct 2026 · analysis from 24 Sept 2026
CEG· Utilities
Constellation Energy
Constellation Energy's high P/E of 42.6 and low owner earnings yield of 1.3% make it an unattractive investment despite a top-quintile ROIC in utilities.
Buffett fit
Weak fit
Owner
25
Durability
20
Management
68
Price
0
Score updated 29 Oct 2026 · analysis from 24 Sept 2026
Buffett's checklist
Each number against Buffett's bar, and where it ranks among Utilities stocks in our database.
How much profit the business makes on each dollar invested in it. Higher is better.
What is left of each sale after the cost of making the product. A high number often means pricing power.
The cash the business earns for its owners, compared with the price of the whole company.
How fast sales grew each year over the last five years.
How many years of today's profit you pay for at today's price. Lower means cheaper.
How much the company owes compared with what it owns outright. Lower is safer.
The four pillars
How the business measures up on each of Buffett's four tests.
If we owned Constellation Energy entirely, the focus would be on improving profitability and managing , given the current of 13.9% and a net margin of 9.1%.
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The utility sector is generally stable, but Constellation Energy's durability is questionable with a 5-year profitable flag showing at least one loss year.
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Constellation Energy's management has shown some discipline with a share count CAGR of -1.34% and a yield of 0.81%.
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The current valuation metrics, including a of 42.6 and an EV/ of 25.9, are far from offering a .
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For and against
The strongest points on each side, with the numbers behind them.
In its favor
5- 1 of 13.9% is top-quintile within the utilities sector.
- 2Net debt/EBITDA of 0.90 indicates manageable .
- 3Interest coverage ratio of 7.9 suggests solid ability to meet interest obligations.
- 4Share count CAGR of -1.34% reflects some share activity.
Concerns
6- 1 of 42.6 is significantly above typical utility valuations, implying high growth expectations.
- 2 yield of 1.3% is unattractive for new investment.
- 3 of 18.38% is below the sector's top-quintile cutoff.
- 4Revenue CAGR of 1.47% suggests limited growth potential.
Price history
$265+488.0%· 5-year return
Weekly closing prices. Touch or hover the line for a date.
The business
How the business works
Constellation Energy Corporation operates as an independent power producer, generating and selling energy products, including electricity and natural gas. Its 31,676 megawatts of capacity span nuclear, wind, solar, natural gas, and hydroelectric sources. The company serves a diverse customer base, including distribution utilities and various sectors. Despite a revenue of $25.53 billion, its net margin is only 9.1%, indicating challenges in converting sales into profits.
How this analysis has moved
The call has held across 6 reviews.
Sep 27, 2026 → Oct 29, 2026
What other investors would say
The same company, judged by three other documented playbooks.
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