According to The World Nuclear Association report, the UN estimates that the global population will hit 9.7 billion by 2050. Two-thirds of the population lives in condensed urban areas.
This spike in urbanized populations, with the increase in electrified end-use products, means we are likely to see an increased electricity demand. While needing to meet this demand, we will struggle with not destroying the environment. There’s also a concern about cleaning up the air supply.
This is because, with its low space requirements and low carbon emissions processing, the future of clean and efficient energy production should take a serious look at nuclear power.
Global investors know these trends, and the market is investing in nuclear power. Many investors wonder how they can get in on this creeping nuclear boom that seems to be approaching. Below is a list of some of the best nuclear stock investments you can make in the uranium market right now.
Best Uranium & Nuclear Energy Stocks
Some investors are going a different route with uranium. You can buy in more directly with mining companies or trust funds that own massive amounts of the commodity itself.
Investing in uranium now is, in all probability, a game for the very patient. But nuclear energy is a certainty, especially on an international scale. If you’re willing to wait for a payoff, buying in now could be worth it a few years later.
1. Cameco Corporation (CCJ)
Founded in 1987, Cameco is one of the largest uranium mining and supply companies in operation today.
Why I like it
Cameco, a major global player, supplies 9% of the world’s uranium products. It holds numerous long-term contracts. This stability provides some measure of security against market price fluctuations. This is a solid bet if you’re looking to invest in a stock that has proven itself over the years.
Cameco Corporation can produce more than 53 million pounds of uranium products annually. The company has 455 million pounds of uranium reserves backing it. Cameco’s market cap is $9.7 billion, and its one-year return rate is 124%.
Why I don’t like it
Cameco is a Canadian company. If you would like to make at-home investments, you might want to consider other US-based or US-inclusive options.
Cameco also saw a weak second quarter earlier this year, missing estimates in revenue and earnings-per-share. Hopefully, this is just a blip and not a foreshadowing. It soon had a surge of 24% at the price increase announcements from RBC Capital and GLJ Research.
The Bank of America rated Cameco as a stock to buy, even with this loss. If you have faith in the stock market, you might want to jump on it now, as the shares are lower than before. The company hopes to reopen its mines, which were closed due to the pandemic; hopefully, there will be an increase in value.
2. Energy Fuels (UUUU)
Energy Fuels is a US-based mining company that’s currently showing a year-over-year increase in revenue and income markers. Other stocks are now beating out this former top option, but its long-standing track record makes it worthy of investment.
Why I like it
Though no longer a leader in the uranium mining market, UUUU can meet increasing demand. It has numerous mines on standby and a significant standing-ready supply of US-origin uranium.
The company is showing good stability. It seeks to expand its mining capabilities into the realm of rare earth elements products. This growth would mean a more diversified portfolio and a more secure investment should the uranium market fluctuate.
Why I don’t like it
From the standpoint of nuclear investment, Energy Fuels doesn’t seem to be a major competitor. It seems possible that they might move away from uranium mining altogether, even if this market explodes in the coming years.
The company closed out 2021’s Q3 with a net loss of $8.0 million. It cited increased development costs and the expense of ramping up its rare earth element mining capabilities. Let’s just hope that investment pays off as intended.
3. Uranium Energy Corp. (UEC)
UEC possesses one of the largest uranium exploration and development catalogs in the United States. The company is also currently expanding.
Why I like it
UEC operates in several states in the Southwestern United States. It holds a major footing in the United States’ uranium exploration market. UEC has a current market cap of almost $700 million, and its stock is up 300% this year.
The company focuses on mining new areas to find uranium supplies. They’re proactive and constantly trying to expand their holdings, which is a good sign regarding their long-term growth.
Why I don’t like it
UEC is still currently trading as a penny stock at $3.13. It might pay off if you’re willing to take a risk based on the above numbers and UEC’s market presence. As always with penny stocks, you want to do your research.
UEC does offer up a look at its current financials on its website. Since they’re transparent with their market cap, you might find that the trends are inspiration enough to invest in.
4. Ur-Energy Inc. (URG)
Ur-Energy is another US-based miner, new but promising.
Why I like it
URG is still relatively new and is trading low (like UEC) at $1.31. Still, Wall Street market analysts predict good things for Ur-Energy, with a potential for tripled revenue and a stock rise of 40% in the next year.
Ur-Energy currently has a market cap of $340.33 million. Despite its relatively small size, its uranium production capacity is 2 million pounds annually. This mining company could see a major payoff if it continues to grow. Plus, according to its website, it’s the lowest-cost uranium producer in the country.
Why I don’t like it
Again, technically still a penny stock, investing in a relatively new company with a low price and low market cap poses some risk to the investor.
Also, though a 2 million pound capacity is nothing to sneeze at, you must compare URG to a player like Cameco at 55 million pounds per year. At this point, it’s hard to know if Ur-Energy will remain a competitor in the expanding uranium market.
5. Western Uranium & Vanadium Corp. (WUC)
Western Uranium & Vanadium Corp. first acquired mineral assets in 2014. They’re based in Colorado and also mine in Eastern Utah.
Why I like it
The company has a longer history than you’d think. It started as Homeland Uranium Inc. in 2006 and later began obtaining shares from smaller mining companies. As it grew, the company took on a Board of Directors and changed its name to showcase its sourced minerals.
It focuses on uranium and vanadium resource mining in the western United States. The company has had an overall positive increase in the past year.
Why I don’t like it
Like many other stocks, WUC had a rough fourth quarter of 2021. The stocks are only $1.46, making them on par with URG and UEC. With a market cap of $57 million, it might be worth getting in on the ground floor.
Since WUC has a history of buying out smaller companies, you might see it as a sign of their willingness to expand. It’s hard to know how long it will take for the stocks to increase, but past trends might make you willing to try it.
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6. Fission Uranium Corp. (FCU)
Fission Uranium Corp. is located in a uranium-rich area of Canada. The founder began the stock in 2013, but the company has roots tracing back to a mineral corporation in 1996.
Why I like it
Dev Randhawa, the founder of Fission Uranium Corp., has decades of experience in mining. His team found the first uranium zone in the Athabasca Basin. Since 2013, the stock has won several awards regarding its success and mining approach.
Why I don’t like it
In 2015, the company tried to merge with Denison Mines Corp. The stockholders were against this move, but Randhawa pushed ahead until the board of directors prevented it. Though companies merge all the time, the fact that this dispute was so severe is a little off-putting.
7. ANU Energy OEIC Ltd.
ANU Energy OEIC Ltd. is a new, state-owned uranium stock in the Republic of Kazakhstan.
Why I like it
This new stock is 48.5% owned by Kazatomprom, another state-owned company mines uranium. Kazatomprom drills 23% of the annual global uranium production, making it the largest in the world. The National Investment Corporation of the National Bank of Kazakhstan holds 48.5% ownership.
Currently, the last 3% of the stock is with Genchi Global Limited, which manages the fund. As all this developed in the last quarter of 2021, the stock isn’t yet open to the public. It will soon be operational and open to offerings.
ANU Energy OEIC Ltd. will hold physical uranium as an investment. The current investments top $50 million. When the stock is open to the public, it will have an additional $500 million from other institutional investors.
Why I don’t like it
Kazakhstan has been building this stock for the past four years, and it still isn’t open to public investors. It could be a sign of confidence, as they’re covering all their bases and ensuring they’re good to go before an official launch. But it could also mean that a state-run stock isn’t as effective as one had hoped.
The Kazatomprom CEO, Mazhit Sharipov, said a board of directors will independently run the stock. This method will keep the state from getting too involved in the process. A board of directors could ensure the stock is responsibly managed, but with no track record, you just have to wait and see.
See Related: Best Lithium Stocks
8. Sprott Physical Uranium Trust (SRUFF)
SRUFF is the world’s largest physical uranium fund.
Why I like it
Sprott offers a way to invest in the uranium industry without investing in miners. It directly provides stock in the commodity. Its assets under management total a whopping $1.1 billion, with an attractive expense ratio of 0.35%.
If you want to hold uranium without dealing with mining companies and their potential politics and fluctuations, this could be a way to go. SRUFF is a closed-end fund and is currently trading at a premium of $10.58.
Why I don’t like it
SRUFF is very new, having launched into the market in July 2021. The company started in Canada in 2005 and currently holds other portfolios worth looking into.
For this reason, we don’t yet have much data on this trust’s market success. There’s not even a publicly-available one-year return number.
It stands to reason that investing in the uranium commodity could be a smart move with a good payoff down the road. However, having little to no performance data makes it difficult to know what this stock is doing.
Top 3 Nuclear ETFs for a Diverse Investment
If you’re new to investing, let’s discuss what an ETF is.
An ETF, or Exchange Traded Fund, is a type of security that tracks a particular index, commodity, sector, or other assets. People can trade ETFs publicly like regular stock on the stock exchange.
Many investors like ETFs because they are cheaper to purchase multiple stocks simultaneously. This method creates some diversification in their investment, which should lower risk.
The ETFs I’ve listed below allow traders to buy into numerous uranium markets simultaneously. The selections include mining companies, reactor parts producers, and physical uranium.
1. Global X Uranium (URA)
Global X Uranium tracks a broad portfolio of over 40 different nuclear-focused companies. These offerings range from uranium miners to nuclear component producers.
Why I like it
Global X Uranium began in 2010 and is currently the largest uranium-focused ETF on the market, up 61% just this year and up 113% over the last full year. Its top investments are uranium miners in Canada and Kazakhstan (the world’s leading uranium producer, with Canada in fourth place).
Global X Uranium’s assets are currently valued at $843 million. The expense ratio is currently a reasonable 0.69%. A 20+-year-old ETF that offers targeted exposure, Global X Uranium seems to offer a solid bet in the uranium market.
Why I don’t like it
Concentration risk is on the high end with this one. Only one uranium producer, Cameco, makes up nearly a quarter of its assets. Its top five holdings (including Kazakhstan’s Kazatomprom, the world’s largest uranium producer) comprise more than half of its weight.
For such an extensive portfolio, that’s a lot of concentration. Too much value held by a handful of holders increases the risk of failure, which I typically prefer to avoid with an ETF.
2. North Shore Global Uranium Mining (URNM)
Despite being a much younger ETF that was launched in 2019, URNM is close behind URA. URNM’s assets under management have a value of $538.1 million and a slightly higher one-year return of $113.9 million.
Why I like it
Like URA, URNM invests in big-player uranium miners in Canada, Kazakhstan, and Australia. It also invests in physical uranium through the Sprott Physical Uranium Trust, which you’ll read about later.
URNM is a hands-on ETF. It manages its investments through fundamental research, review of industry publications, and sell-side research. It also holds management meetings with the heads of its stock companies. Much like URA, URNM has seen its assets recently hit a major expansion, up from $48 million at the end of 2020.
Why I don’t like it
84% of URNM’s holdings are also in URA’s portfolio, but URNM’s portfolio is a little less diverse, with only 34 holdings (compared to URA’s 45). It is also a bit too concentrated for my taste, with the bulk of its assets held by a handful of large, international uranium producers. URNM’s expense ratio is 0.85%, which is rather high. URA offers a more diverse, lower-expense investment.
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3. VanEck Uranium+Nuclear Energy (NLR)
Like URA and URNM, VanEck has also seen its assets hit a pretty major swell of around 57% this year.
Why I like it
VanEck offers a much more attractive dividend yield than the previous two ETFs on this list, at a healthy 2.0%. URA offers a much lower 0.6% dividend yield, and URNM is a little better at 1.8%.
VanEck is also a much more local investment, with most of its investments made in the United States and Japanese utility companies. URA and URNM are both invested mostly in international holders.
Why I don’t like it
NLR holds only 24 assets, most of which are utility companies. Its assets under management are valued at only $28 million, with utilities holding 87% of those assets. NLR’s returns are up only 12.5% to date (compared to URA at 72% and URNM at a whopping 97%).
Utility companies aren’t structured to benefit from spikes in uranium prices like mining companies. An ETF so concentrated on utilities instead of a portfolio of mining companies isn’t likely to see a return.
Even as you’re watching uranium prices potentially surge, utility companies aren’t primed to take advantage of the market.
If you want to feel a more direct result from market price spikes, an ETF that tracks mining companies or commodity funds might be of more interest.
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