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Today, nuclear energy provides about 10% of the world’s electricity from approximately 440 power reactors.1 However, both of those numbers are likely to increase as more nations turn to nuclear to meet their energy and emission-related goals.
Nuclear energy is the only low carbon energy source that provides scalable, 24-7 baseload power. Nuclear also has the lowest energy accident fatalities for OECD countries.2
Plus, it has the highest capacity factor amongst all other energy sources, recording a capacity factor of 92.5% in 2020, compared to 74.3% from geothermal, 56.6% from natural gas, 41.5% from hydropower, 40.2% from coal, 35.4% from wind, and 24.9% from solar.3
This means that nuclear power plants produced maximum power more than 92.5% of the time during the year, compared to solar producing maximum power 24.9% of the time, for example.
Additionally, global electricity demand is expected to increase 75% from 2020 until 2050.4 For the world to accommodate this increase in demand, while also meeting its net zero carbon emission goals, it’s reasonable to believe that more nations will turn to nuclear energy.
That sounds like an investment opportunity, so we analyzed the nuclear energy industry to identify well-positioned stocks that might benefit from this paradigm shift. Below are the best nuclear energy stocks to invest in.
Best Nuclear Energy Stocks
#1. Cameco Corporation (CCJ)
- Price: $25.24
- Market Capitalization: $10B
- 1-Year Trailing Performance: +19%
Cameco is one of the world’s largest providers of uranium fuel, in addition to being a leader supplier of uranium refining, conversion, and fuel manufacturing services.
The company owns tier-one mines in Canada and maintains a 40% ownership of a mine in Kazakhstan, a region that leads the world in uranium production each year.5
Cameco strategically operates on long-term time horizons. Its diversified contract portfolio has built-in price protection and leverage to accommodate rising prices for its global customer base.
Also, Cameco’s low time preference is made evident by its efforts to vertically integrate its operations and capacities across the entire fuel cycle, as you can see in the image below:
The company is making every effort to accommodate the world’s increase in electricity demand with its own products and services.
Cameco is currently the only major uranium pure play that is not state owned or controlled.
#2. Uranium Energy Corp. (UEC)
- Price: $3.88
- Market Capitalization: $1.1B
- 1-Year Trailing Performance: +17%
Uranium Energy Corp. is one of America’s fastest growing, 100% unhedged pure play uranium companies.
It has the largest resource base of fully permitted ISR (in situ recovery) projects of any U.S. based producer.6
UEC currently has a production profile of 6.5M lbs. of U3O8 per year, plus a warehoused uranium holding of 5M lbs acquired at approximately $38/lb.
UEC recently acquired Uranium One America for $112 million cash in April 2022, greatly increasing the company’s presence and production in Wyoming’s uranium-rich land.
Also, there’s been a premium on America’s supply of uranium following Russia’s invasion of Ukraine.
A company like UEC is well positioned to fill that demand for uranium as nations like the United States begin to prioritize energy independence once again.
#3. Denison Mines Corp. (DNN)
- Price: $1.24
- Market Capitalization: $997M
- 1-Year Trailing Performance: -6%
Denison Mines Corp. is a Canadian uranium exploration, development, and production company.
Denison Mines maintains an equity interest in a number of uranium mining projects in the Athabasca Basin, a region in Northern Canada that currently supplies about 20% of the world’s uranium.
Its portfolio includes a 95% effective interest in the Wheel River project, a 22.5% interest in the McClean Lake Uranium Mill, and a 66.9% interest in the Waterbury Lake project, among several other stakes in projects operated by the uranium majors like Cameco and Orano.7
The Wheeler River project is the largest underdeveloped uranium project in the Eastern side of the Athabasca Basin. Additionally, the McClean Lake Uranium Mill accounts for +11% of global uranium production.
As of early 2022, Denison Mines holds 2.5M lbs of physical uranium acquired at an average cost of $29.66/lb.
#4. NexGen Energy (NXE)
- Price: $4.88
- Market Capitalization: $2.39B
- 1-Year Trailing Performance: -2%
NexGen Energy is a Canadian company that’s developing the Rook I Project into the largest low-cost producing uranium mine globally.
According to the company’s investor presentation, the Rook I Project is the largest development-stage uranium deposit in the world.8
This is a multi-decade project; the tier-one asset is being permitted for a 24-year operating life.
The company forecasts that Rook I’s planned production of 30M lbs could represent 15-20% of global production.
It’s important to place an appropriate amount of emphasis on the word “could” in this forecast.
Nonetheless, NXE appears to be an asymmetric investment opportunity amongst the best nuclear stocks if it executes in the coming decades.
#5. Centrus Energy Corp. (LEU)
- Price: $25.61
- Market Capitalization: $371M
- 1-Year Trailing Performance: +13%
Centrus Energy is an American supplier of nuclear fuel and services for the nuclear power industry in North America, Asia, and Europe.
Centrus Energy has a $1B order book of nuclear fuel sales to major utilities through the end of the decade.
Also, it’s the only company with a Nuclear Regulatory Commission license for HALEU production, which stands for high-assay low enriched uranium.9
HALEU is required for the advanced nuclear reactors that are coming online in the United States. These reactors will not be able to operate without this enriched fuel source that is currently not produced in the U.S. today.
Enter: Centrus Energy, the pioneer of U.S. HALEU production with support from the United States Department of Energy.
Furthermore, Centrus’s proprietary AC100M centrifuge is currently the only deployment-ready U.S. uranium enrichment technology that meets national security standards. This is a big deal because U.S. policy prohibits the use of foreign enrichment technologies for defense missions.
The U.S. government needs enriched uranium for its nuclear forces, military microreactors, naval reactors, space missions, and reactor demonstrations. As of this writing, Centrus Energy effectively has a monopoly on this domestic demand.
Once again, Centrus Energy is (or will be) the only show in town.
Other Nuclear Energy Stocks to Consider
The Sprott Physical Uranium Trust (SRUFF) is the world’s largest physical uranium investment fund. The Trust holds approximately 56M lbs of uranium, worth an estimated $2.9 billion.10
Owning shares of SRUFF provides secure, convenient and liquid exposure to uranium, which is needed for the whole nuclear energy thing to work.
Alternatives to Nuclear Energy Stocks
Buying a nuclear energy exchange-traded fund is one alternative to buying individual nuclear energy stocks.
Exchange-traded funds like the Global X Uranium ETF (URA) and the VanEck Uranium+Nuclear Energy ETF (NLR) provide broad exposure to the publicly traded nuclear energy industry.
They are relatively expensive funds to own – with expense ratios of 0.69% and 0.60% – but niche exposure always comes at a cost.
A secondary alternative is to buy Big Energy companies like Duke Energy (DUK), Dominion Energy (D), Constellation Energy Corp. (CEG), or Entergy Corp. (ETF).
If demand for nuclear energy grows like some of the metrics in this article suggests, then these large energy providers, who operate nuclear units themselves, will also benefit like the pure-play nuclear energy stocks previously mentioned, albeit to a lesser degree.
Nuclear Energy Stocks: Frequently Asked Questions
What is the best way to invest in nuclear energy?
There are dozens of nuclear energy stocks to invest in, such as Cameco Corporation (CCJ), Uranium Energy Corp. (UEC), and Centrus Energy (LEU). Another way to invest in nuclear energy is by purchasing shares in the Sprott Physical Uranium Trust, which holds about $2.9 billion worth of uranium, the commodity that’s used as fuel to power nuclear plants. Last, URA and NLR are two diversified ETFs that provide exposure to the nuclear energy subsector.
What is the best uranium stock to buy?
Cameco Corporation (CCJ) is one of the best uranium stocks to buy given its critical role in the nuclear energy industry. It provides uranium-related services across the value chain, from owning and operating mines, to refinery, and fuel manufacturing. Additionally, and perhaps most importantly, Cameco is the only pure-play uranium company that operates independently from a state.
Wrapping Up: The Best Nuclear Energy Stocks
Nuclear energy has the potential to solve a portion of the world’s energy and carbon emission problems. With time, we expect the companies in this article to benefit as more nations turn to nuclear energy.
Article Sources
1. World-Nuclear. “Nuclear Power in the World Today, https://world-nuclear.org/information-library/current-and-future-generation/nuclear-power-in-the-world-today.aspx.”
2. World-Nuclear. “The Harmony Programme, https://world-nuclear.org/our-association/what-we-do/the-harmony-programme.aspx.’
3. Energy.gov. “Nuclear Power is the Most Reliable Energy Source and It’s Not Even Close, https://www.energy.gov/ne/articles/nuclear-power-most-reliable-energy-source-and-its-not-even-close.”
4. IEA. “World Energy Outlook 2021, https://iea.blob.core.windows.net/assets/88dec0c7-3a11-4d3b-99dc-8323ebfb388b/WorldEnergyOutlook2021.pdf.”
5. Camco Corporation. “Investor Presentation, https://s3-us-west-2.amazonaws.com/assets-us-west-2/quarterly/Cameco-Investor-Presentation.pdf.”
6. Uranium Energy Corporation. “Investor Presentation, https://www.uraniumenergy.com/_resources/presentations/UEC-Corporate-Presentation.pdf?v=0.734.”
7. Denison Mines Corporation. “Corporate Update May 2022, https://denisonmines.com/site/assets/files/6265/2022-05-10_denison_investor_update.pdf.”
8. NexGen Energy Limited. “Corporate Presentation – May 2022, https://s28.q4cdn.com/891672792/files/doc_downloads/2022/NexGen_Presentation_May2022_V2-compressed.pdf.”
9. Centrus Energy Corporation. “Centrus Investor Deck March 2022, https://investors.centrusenergy.com/static-files/058b474a-c135-4600-a84b-e9908864a7af.”
10. Sprott Inc. “Sprott Physical Uranium Trust, https://sprott.com/media/4119/uranium-trust-presentation-deck.pdf.”
This article is for informational purposes only, and it is not intended to be investment advice. Read our editorial guidelines and public equities research methodology to learn more about how we selected the best nuclear energy stocks.
