The clean energy revolution has a soldier that's waiting to join the fight. That soldier is uranium. The core application for uranium is in providing nuclear power. However, the nuclear power accident at the Fukushima plant in Japan in 2011 drove uranium into a prolonged bear market.
The irony is that demand for nuclear power plants is increasing. According to the World Nuclear Association as of July 2021, there were 444 nuclear power plants in operation throughout the world. But an additional 479 plants are either proposed, planned, or under construction.
That's a supply and demand puzzle that has to be solved. According to Statista, global demand for uranium is expected to reach 209 million pounds by 2035. To achieve that goal, new uranium assets will have to be discovered.
The takeaway is that now is an ideal time for investors to consider uranium stocks. The big payoff may still be some time away, but that's why it's time to “mine" (pun intended) for some of the companies that are leading the way in this sector.
Quick Links
- BHP Group
- Cameco Corporation
- Energy Fuels
- Uranium Energy
- NextGen Energy
- Denison Mines
- Global X Uranium ETF
#1 - BHP Group (NYSE:BHP)
As is the case with many precious metals and minerals stocks, a good place to look for publicly traded companies to invest in is the mining sector. When it comes to uranium, BHP Group (NYSE: BHP) is one to keep your eye on.
BHP is an Australian-based company, and it mines for uranium almost exclusively through its Olympic Dam project in South Australia. The site holds some of the world’s largest deposits of uranium – in addition to copper and gold. This explains why Australia is the third largest uranium producer in the world.
Furthermore, BHP Group is not just a play on uranium, but it can provide exposure to both the gold and copper markets. While prices for both metals remain volatile, the long-term trend for both is for higher price movement.
BHP stock is attractively priced at just 10.38x earnings. And it pays a high-yielding semi-annual dividend that currently yields a20%. That’s an impressive stream of passive income for investors who are waiting on the uranium boom.
About BHP Group
BHP Group Limited operates as a resources company in Australia, Europe, China, Japan, India, South Korea, the rest of Asia, North America, South America, and internationally. The company operates through Copper, Iron Ore, and Coal segments. It engages in the mining of copper, uranium, gold, zinc, lead, molybdenum, silver, iron ore, cobalt, and metallurgical and energy coal.
Read More - Current Price
- $49.20
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 3 Buy Ratings, 3 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $68.00 (38.2% Upside)
#2 - Cameco Corporation (NYSE:CCJ)
Next up is Cameco Corporation (NYSE: CCJ). It’s the second largest provider of uranium fuel in the world. The company has interest in several tier-one mining and milling operations. The company has over 30 million pounds of uranium concentrates. It’s also one of the leading suppliers of uranium refining, conversion and fuel manufacturing services.
In addition to having mining operations in Canada, the company also operates mines in the United States and Kazakhstan. Like many uranium companies, the last decade or so hasn’t been kind to Cameco. But that changed in 2022. When Russia invaded Ukraine, the spot price of uranium shot up and Cameco responded by bumping up its annual production by 70% from the prior year. The company immediately set to work at securing contracts to lock in profitable rates and expects to produce approximately 20 million pounds of uranium in 2023 – that's nearly double their output in 2022.
About Cameco
Cameco Corporation provides uranium for the generation of electricity. It operates through Uranium, Fuel Services, Westinghouse segments. The Uranium segment is involved in the exploration for, mining, and milling, purchase, and sale of uranium concentrate. The Fuel Services segment engages in the refining, conversion, and fabrication of uranium concentrate, as well as the purchase and sale of conversion services.
Read More - Current Price
- $52.44
- Consensus Rating
- Buy
- Ratings Breakdown
- 7 Buy Ratings, 0 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $66.56 (26.9% Upside)
#3 - Energy Fuels (NYSE:UUUU)
The thesis for buying Energy Fuels, Inc. (NYSEAMERICAN:UUUU) to your portfolio is the company’s focus on U.S. production. In fact, the company is the country’s leading producer of uranium along with other rare earth elements that will be needed to power a clean energy future.
If you’re thinking this might draw the attention of the U.S. government, you’d be correct. In fact, in January 2023, Energy Fuels sold 200,000 pounds of its domestically-produced uranium to the government for use in its strategic uranium reserve for $18.5 million of total proceeds.
As of this writing, UUUU stock was trading at $5.52 - just above penny stock range for most investors. And according to Energy Fuels analyst ratings, the stock has an upside of 106%.
This is a company that is not yet profitable and short interest of over 12% is something that investors should make note of. However, the stock continues to draw at least modest attention from institutional investors. While the overall percentage of 38% is not particularly impressive, buying has outpaced selling in eight of the last nine quarters ending in the fourth quarter of 2022.
About Energy Fuels
Energy Fuels Inc, together with its subsidiaries, engages in the extraction, recovery, recycling, exploration, permitting, evaluation, and sale of uranium mineral properties in the United States. The company produces and sells vanadium pentoxide, rare earth elements, and heavy mineral sands, such as ilmenite, rutile, zircon, and monazite.
Read More - Current Price
- $5.30
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 2 Buy Ratings, 2 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $8.50 (60.4% Upside)
#4 - Uranium Energy (NYSEAMERICAN:UEC)
The next uranium stock on this list is Uranium Energy (NYSEAMERICAN: UEC). This is a small-cap company with many projects in the Americas. Most notably, the company has several projects in the Athabasca Basin of northern Saskatchewan, Canada. This is known as one of the world’s premier uranium mining jurisdictions.
In May 2023, the company filed an S-K 1300 technical report about its Roughrider Project in that basin. The company sees this a future catalyst that anchors the companies high-grade Canadian pipeline. This is the next step towards moving the project towards production.
UEC stock is a penny stock and that means investors should expect some volatility. But MarketBeat’s Uranium Energy analyst ratings give the stock a price target that gives the stock an upside of over 200%. There’s no dividend here and the stock does trade at over 33x earnings. But the risk may be worth the potential reward.
About Uranium Energy
Uranium Energy Corp., together with its subsidiaries, engages in exploration, pre-extraction, extraction, and processing uranium and titanium concentrates in the United States, Canada, and Paraguay. It owns interests in the Palangana mine, Goliad, Burke Hollow, Longhorn, and Salvo projects located in Texas; Anderson, Workman Creek, and Los Cuatros projects situated in Arizona; Dalton Pass and C de Baca project located in New Mexico; Roughrider, Shea Creek, Christie Lake, Horseshoe-Raven, Hidden Bay, Diabase, West Bear, JCU, and other project located in Canada; and Yuty, Oviedo, and Alto Paraná titanium projects in Paraguay.
Read More - Current Price
- $7.08
- Consensus Rating
- Buy
- Ratings Breakdown
- 3 Buy Ratings, 0 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $11.42 (61.3% Upside)
#5 - NextGen Energy (NYSE:NXE)
With a market cap of $1.85 billion, NextGen Energy Ltd. (NYSEAMERICAN: NXE) is not the smallest of the miners on this list, but it does carry some risk for investors. Specifically, in addition to not being profitable yet, the company is still in the pre-revenue phase.
That could be changing, but it won’t be for some time yet. Like Uranium Energy, NextGen Energy has rights to projects in Canada’s Athabasca Basin. The project that is closest to going online is the company’s Rook 1 project. According to the company this will be the world’s largest, low-cost uranium development mine. The project will be 100% levered to future uranium prices.
On May 1, 2023, the company announced it has generated over $1 billion in available debt in the form of non-binding expressions of interest from potential lenders for the project.
About NexGen Energy
NexGen Energy Ltd., an exploration and development stage company, engages in the acquisition, exploration, and evaluation and development of uranium properties in Canada. It holds a 100% interest in the Rook I project that consists of 32 contiguous mineral claims totaling an area of 35,065 hectares located in the southwestern Athabasca Basin of Saskatchewan.
Read More - Current Price
- $6.96
- Consensus Rating
- Strong Buy
- Ratings Breakdown
- 4 Buy Ratings, 0 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- N/A
#6 - Denison Mines (NYSEAMERICAN:DNN)
The last of the pure-play uranium mining stocks on this list is Denison Mines Corporation (NYSEAMERICAN:DNN). LIke many of the companies on this list, Denison has interests in the Athabasca Basin. Specifically, the company has four projects in development that cover approximately 300,000 acres in the region, including the infrastructure-rich eastern portion of the basin.
Its flagship project is its Wheeler River project in which the company has an effective 95% interest. It also owns 22.5% of the McClean Lake project, which includes the McClean Lake mill that can process up to 24M lbs. of uranium per year.
The company hit some milestones in 2022 that bring it closer to production, but that is still likely to be years away. That’s the risk of investing in a true penny stock. However, the company’s balance sheet appears to be in good shape with minimal debt so long-term shareholders have less risk of dilution.
About Denison Mines
Denison Mines Corp. engages in the acquisition, exploration, and development of uranium bearing properties in Canada. Its flagship project is the Wheeler River uranium project covering an area of approximately 300,000 hectares located in the Athabasca Basin region in northern Saskatchewan. The company was formerly known as International Uranium Corporation and changed its name to Denison Mines Corp.
Read More - Current Price
- $1.89
- Consensus Rating
- Strong Buy
- Ratings Breakdown
- 7 Buy Ratings, 0 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $3.00 (58.7% Upside)
#7 - Global X Uranium ETF (NYSEARCA:URA)
As you can tell, uranium stocks hold a lot of potential, but also carry outsized risk. It’s impossible for many retail investors to know if any of these projects will ultimately pan out. That’s why many investors may benefit from investing in an exchange-traded fund (ETF) focused on uranium stocks. And one of the best to consider is the Global X Uranium ETF (NYSEARCA:URA).
The Global X Uranium ETF currently has $1.35 billion of assets under management and includes several of the names on this list. The fund’s portfolio includes mining companies, refines and equipment manufacturers (I.e. the picks and shovel companies) so investors do get comprehensive coverage of the industry.
However, as a reflection of the risk in this sector, the fund is heavily weighted to one holding, Cameco Corporation which makes up about 23% of the fund’s holdings as of May 2023. Investors may be rewarded for that risk when you look at the five-year performance of the fund which currently sits at 39%.
About Global X Uranium ETF
The Global X Uranium ETF (URA) is an exchange-traded fund that mostly invests in stocks based on a particular theme. The fund tracks a market-cap-weighted index of companies involved in uranium mining and the production of nuclear components. URA was launched on Nov 4, 2010 and is managed by Global X.
- Current Price
- $27.97
- Consensus Rating
- Buy
- Ratings Breakdown
- 2 Buy Ratings, 1 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $27.97 (0.0% Downside)
If the world is truly going to achieve a Net Zero emissions future, the world will need to find and unlock new and existing supplies to meet this rising demand. Nuclear power will almost assuredly become part of that conversation, and new uranium discoveries will be increasingly valuable in bringing balance to the market. If that happens, then the law of supply and demand makes it clear that the spot price of uranium will soar.
But make no mistake about it, the price of uranium is highly volatile. At the end of April, the spot price of uranium was up about 10% in 2023. However, it's down about 20% from the nearly 12-year high it made in April 2023.
Rising prices will make it more profitable to mine for uranium. And that's why many of the stocks on this list are those of mining companies. Like the oil market, miners need the spot price of the underlying commodity to be at a point that makes their operations profitable.
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