There is one thing about NRG that seemed unusual for a utility, though. It was one of the first to invest in renewable energy, and it spent a lot of money building out that infrastructure, particularly solar. For a while it seemed like the company had totally reinvented the renewable energy business.
In 2014 NRG announced a large realignment initiative, and it reorganized its businesses under NRG Home, NRG Business and NRG Renew. This was supposed to be positive, yet it left many investors confused and unsure of what it owned.
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Was it a regular utility? An alternative energy play? Some sort of hybrid?
Shareholders did not like the change, and the stock went out of style on Wall Street. In September 2015 management laid out its NRG Reset plan to spin off the clean energy business as a separate company. But the timing was wrong, and the stock tumbled 6 percent on the day the news came out.
"This total 180 from NRG's management — remember, less than a year before they couldn't stop talking about their clean energy future — totally undermined investors' trust in the company. It was a huge about-face that made the executives here seem clueless," Cramer said.
And on Dec. 3, 2015, the company announced that David Crane would step down as CEO. At that point, the damage was done. The company had taken on a large amount of debt.
The stock has rebounded dramatically with the price of oil in the past few weeks, but that did not convince Cramer to be a buyer.
"It is very simple, the bottom line is that owning a utility stock should never be this fraught," Cramer said.
Investors should not have to worry how a company is spending its money or if a dividend will be slashed. So, for those looking for a utility play, Cramer said stay away from NRG Energy and go with something more reliable like American Electric Power or Con Ed. And for Solar, stick with First Solar.