How Does the Power Generation Mix Affect the Market Value of US Energy Companies?

To remain competitive in the decarbonization process of the economy worldwide, energy companies must preserve their market value to attract new investors and remain resilient throughout the transition to net zero. This article examines the market value of US energy companies during the period 2012–2024 in relation to their power generation mix. Panel regression analyses reveal that Tobin’s q and price-to-book ratios increase significantly for solar and wind power, while they experience moderate increases for natural gas power. In contrast, Tobin’s q and price-to-book ratios decline for nuclear and coal power. Furthermore, accounting-based profitability, measured by the return on assets (ROA), does not show significant variation with any type of power generation. The findings suggest that market investors prefer solar, wind, and natural gas power generation, thereby attributing greater value (that is, demanding lower risk compensation) to green companies compared to traditional ones. These insights provide guidance to executives, investors, and policy makers on how the power generation mix can influence strategic decisions in the energy sector.

• Publication year

  2025

• Venue

  Journal of Risk and Financial Management

• Publication date

  2025-08-06

• Fields of study

  Not labeled

• Identifiers
  DOI 10.3390/jrfm18080437
• External record

  Open on Semantic Scholar

• Source metadata

  Semantic Scholar

• No claims are published for this paper.

• No concepts are published for this paper.

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