There’s a clean energy source that looks likely to be coming back. Although controversial, it’s arguably crucial to humanity’s sustainability as a species. It also helps the planet in other ways, such as combating climate change and fulfilling our need for a power source to replace thermal coal. That source of energy, of course, is uranium and nuclear energy. In this article, we’ll talk about three uranium stocks you can tap into to help forge a greener future for humankind.
The world’s pursuit of reducing emissions and reaching targets has revived the controversial power source. Meanwhile, developments in miniaturized nuclear reactors and nuclear fusion technology have done their part to put the power source on the watch lists of many governments worldwide. The rising urgency to save our planet, along with the discontinuation of coal and natural gas (a fossil fuel), are key catalysts. These stocks, therefore, may yield substantial returns in the future.
What makes these stocks appealing is that most trade-in-step with the spot price of uranium. I think that makes these companies very undervalued. Uranium stocks may be seen as risky and frankly less seductive plays than other materials such as lithium stocks. However, with risk and obscurity comes opportunity. If everyone were thinking about buying uranium stocks right now, this opportunity to scoop some share up at a bargain would not exist.
So, buckle up and get ready to power up your portfolio with these top uranium stocks.
| CCJ | Cameco Corporation | $26.68 |
| UEC | Uranium Energy | $2.52 |
| DNN | Denison Mines | $1.03 |
Cameco Corporation (CCJ)
Cameco Corporation (NYSE:CCJ) is one of the largest and most significant uranium producers. It operates mines in critical locations in Canada, US, and Kazakhstan.
Cameco fills the role of being both a uranium stock as well as a blue-chip materials stock in its own right. Its proven exploration of the material puts it in an excellent position to benefit from increasing uranium prices as demand grows. That’s thanks to its established operations.
Looking at the brand’s valuation ratios, we can see an impressive demand surge over the last few quarters. Sales quarter-over-quarter have risen 72.60%. Additionally, the company’s earnings per share have surged 185% this year alone.
The spot price of uranium is set to increase to $59.60 in 2024. That’s due to fluctuations in supply and demand. Since it’s currently hovering in the low double digits at around $52 at the time of writing, I think CCJ stock has the considerable upside to appreciate rapidly. This is especially true as 30 countries worldwide embrace the energy source and restart or begin to build reactors.
Uranium Energy (UEC)
Uranium Energy (NYSEMKT:UEC) is another uranium stock that should be on your watchlist. This company has a slightly different strategy and positioning in the market than Cameco. Uranium Energy situates itself into providing low-cost, in-situ recovery of uranium. This can be considered an exploration firm that specializes in unearthing low-grade materials, such as copper.
Low-grade uranium ores are primarily used in nuclear reactors as a fuel source, and are generally more difficult for ore consumers to extract their energetic content. Low-grade ore is predicted to be especially popular in the developing world, partially to help offset the steep construction and maintenance costs of keeping nuclear reactors online. Uranium Energy can undoubtedly benefit from this.
Another plus for the company is that many of its projects are located outside the United States, in countries like Paraguay. This means that investors can benefit from a degree of diversification by buying shares of the stock.
Denison Mines (DNN)
Denison Mines (NYSEMKT:DNN) fills a gap in your portfolio if you are after a uranium producer that explores high-grade ores. This company is situated in Canada and explores the Athabasca Basin, where some of the wealthiest ores can be found.
High-grade uranium is used for various use cases, including in nuclear reactors. Although the ores are more expensive to procure, they are also far easier to extract energy from than their lower-yield counterparts. They also have use in smaller-sized reactors, laboratories, naval vessels, nuclear weaponry, and other experimental fields set to expand.
What’s better is that Denison is also a penny stock with a tremendous upside. So even with a small amount of money, investors can potentially multi-bag by scooping up business shares.
Denison Mines provides investors with some of the best broad exposure to high-yield uranium mining and can also go with lower-yield UEC if one is particularly bullish about the materials’ long-term prospects.
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On the date of publication, Matthew Farley did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.