The best nuclear energy stocks represent companies that have a future as world seems to be fast approaching an energy crisis. Oil prices soared during the better part of the year, while natural gas prices are rising on fears over supply constraints heading into the winter.
Some experts claim that nuclear energy is perhaps critical in powering our world, arguing that it is cleaner and arguably better from an environmental standpoint than oil and natural gas.
Nuclear energy constitutes just 10% of the world’s power supply at this time. As we advance, the International Atomic Energy Agency (IAEA) forecasts that the global nuclear-generating capacity will likely double by 2050. Therefore, the nuclear energy stocks will likely continue succeeding well into the future in the future.
|ECIFY||Electricite de France||$2.35|
Cameco Corp. (CCJ)
Cameco Corp. (NYSE:CCJ) is positioned to capitalize on the growing trend toward nuclear energy.
There’s been a healthy uptick in its stock price of late, but it still trades at a hefty bargain to its long-term value. The increase in uranium prices has affected the company’s top-line results. Its revenues have improved by more than 25% in the past couple of quarters.
In its second quarter, company revenues improved by a whopping 51.8% to $435 million. Cameco posted an earnings beat of 13 cents, a significantly better result than the previous quarter.
With CCJ’s substantial fixed cost basis, a strong sales improvement will likely lead to a robust improvement in its operating margins. It’s already benefitting immensely from the higher average realized uranium prices and its fuel services sales.
Nuscale Power (SMR)
Nuscale Power (NYSE:SMR) develops small-scale nuclear power plants. Currently, nuclear plants are massive, expensive to develop and prone to delays. NuScale’s small modular nuclear power plant can produce up to 60 megawatts of energy.
The company recently struck a deal with the U.S. Department of Energy and has been contracted to build several nuclear reactors in the Idaho region. These are likely to be completed by 2029 and 2030, news of which led to a strong uptick in the company’s share prices.
It went public in May this year via a special purpose acquisition company (SPAC) reverse merger and started trading at roughly the $10 mark. It currently trades at 20% to 30% higher than its de-SPAC price, which may seem like an overblown valuation. However, those bullish on the stock over the long-term should invest in it at current levels.
U.S. Nuclear (UCLE)
U.S. Nuclear (OTCMKTS:UCLE) is speculative but still mertis consideration among the best nuclear energy stocks to buy.
The firm operates as a radiation-detection business, developing specialized instruments sold to the U.S. military, nuclear power plants, laboratories and a few hospitals. The equipment is highly specialized and is remarkably sensitive, which is why a small customer base uses them.
Nevertheless, with the events that have transpired recently, the demand for radiation-detection tools is likely to rise in the future as more countries start using nuclear reactors as alternative forms of generating electricity.
The market itself is likely to grow at a remarkable 7% CAGR by 2030 to a $5 billion market. Getting a small fraction of that market could prove to be huge for UCLE stock.
BHP (NYSE:BHP) has established itself as one of the largest mining firms in the world.
The Australian commodities player mines minerals and metals, including uranium. It produced roughly 3.3 million metric tons of uranium in fiscal 2021.
Investing in a secondary play such as BHP allows investors to effectively manage their risk and also gain exposure to the fast-growing nuclear industry. BHP operates a robust business that has capitalized superbly on the commodity pricing cycle over the past 12 months.
It registered a record adjusted EBITDA figure of $40.6 billion in fiscal 2022, primarily driven by iron core and copper. Despite the market headwinds at this time, it plans to accelerate its investments in future-facing commodities. These commodities are likely to include uranium, which could be a major growth catalyst for BHP down the road.
Denison Mines (DNN)
Denison Mines (NYSEAMERICAN:DNN) operates as a uranium exploration and development company. The Canadian miner is also involved in the maintenance of mines and post-closure mine care.
A lot of the enthusiasm surrounding the stock stems from its investments in various uranium mining projects. It has a 95% effective interest in its primary Wheeler River project, which is currently in its feasibility stage. Denison also has 22.5% and 66.9% interest in the McClean Lake and Waterbury Lake Projects, respectively.
These assets hold massive potential for growth in terms of output and the remarkably low costs of producing uranium at its mines. Investors looking to pick up some long-term plays in the nuclear energy space should be excited about DNN stock and its prospects.
Electricite de France (ECIFY)
The European Union recently decided that some nuclear and gas projects be considered green, granting access to affordable loans and state programs. The decision was part of its efforts to transition away from Russian oil.
French nuclear energy company Electricite de France (OTCMKTS:ECIFY) has been attracting plenty of attention ever since.
The company is a state-owned enterprise that will benefit from the country’s push for nuclear power to become a major part of its energy strategy.
The French Government owned an 84% stake in the business but recently raised its stake to 100%. Moreover, the company will build large-scale nuclear power stations over the next several years.
Hence, with the support of the government, ECIFY has the potential to become an attractive investment down the road.
Centrus Energy (LEU)
Centrus Energy (NYSEAMERICAN:LEU) is arguably the best nuclear energy pure-plays. The nuclear fuel supplier boasts robust fundamentals and is currently benefitting from the tailwinds in the sector.
Its deployment-ready centrifuge enriches uranium for utilities in various countries apart from the U.S.
Additionally, its already stellar margin profile benefited from the price improvement in enrichment services and renegotiated uranium manufacturing contracts.
Its EBITDA and net income margins are above 50% for the year, and its $400 million deferred tax assets will shield years of future profits. Moreover, revenues have grown by double-digit margins this year, while its stock still trades at just 2.2 times forward sales estimates.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.