One of the summer’s most-hyped movies, “Oppenheimer” by filmmaker Christopher Nolan, is set to hit theaters this weekend. The film is a biographical thriller based on the life of J. Robert Oppenheimer, who oversaw the development of the atomic bomb. The summer blockbuster, which is expected to break box-office records, could also drum up interest in investing in nuclear power, particularly uranium stocks.
While the movie chronicles the most destructive use of nuclear power, Oppenheimer was also active in the postwar development of nuclear energy. The clean energy source is currently responsible for one-tenth of the world’s electricity generation with estimates that it could grow to 14% by 2050.
Amid rising demand for nuclear power, the spot price of uranium, which is the main fuel for nuclear reactors, has catapulted higher in recent years, rising from around $27 per pound in July 2021 to nearly $56 per pound today.
Those who want to invest in the future of nuclear energy should consider these top uranium stocks.
Cameco (CCJ)
Cameco (NYSE:CCJ) is one of the world’s largest uranium producers with a 9% share of global uranium production as of 2021. In 2022, the company’s production hit 10.4 million pounds, up 70%.
Cameco owns a majority stake in the McArthur River deposit, which is considered the world’s largest, highest-grade uranium deposit. It also has mining operations in the United States and Kazakhstan.
While uranium prices are up substantially over the past few years, they are a long way off from their all-time high of $140 per pound, made in 2007. As rising demand drives the price of uranium higher, Cameco and its shareholders should benefit.
The company’s first-quarter results were strong. Cameco beat analysts’ estimates on the top and bottom lines, with revenue rising nearly 73% to $687 million and non-GAAP earnings per share of 27 cents exceeding forecasts by 11 cents. For the full year, analysts expect Cameco to post $1.9 billion in revenue, representing a more than 37% increase.
Considering existing market dynamics, CCJ stock holds substantial potential to appreciate further, making it one of the top uranium stocks to watch.
Uranium Energy (UEC)
Uranium Energy (NYSEMKT:UEC) is an emerging uranium miner focused on acquiring assets in the southwestern U.S. states. Additionally, its Alto Paraná Titanium project in Paraguay is one of the world’s highest-grade and largest ferrotitanium deposits. This material is an alloying additive used in the manufacturing and strengthening of steel and stainless steel.
While the miner has two production-ready projects in South Texas and Wyoming, it is waiting until the price of uranium hits $60 per pound to resume production. That is less than 8% above where uranium trades currently. The company notes that it has an annual production capacity of 8.5 million pounds and that it is unhedged.
“UEC is unhedged, with no contracts at pre-set prices, and is most highly leveraged to uranium’s price compared to all other uranium miners globally,” the company states.
Detractors point to Uranium Energy’s lack of production and shareholder dilution. However, it’s important to note that such dilution strategies have helped UEC stave off a substantial debt load.
In short, UEC provides maximum exposure to burgeoning uranium demand, setting the stage for enticing long-term investment returns.
Denison Mines (DNN)
Denison Mines (NYSEMKT:DNN) is based in Canada with numerous projects in the Athabasca Basin region, which the company notes is “home to the world’s largest and highest-grade uranium mining and milling operations.” They include a 95% stake in the Wheeler River Uranium Project, which is the largest undeveloped uranium project in the region.
Denison Mines is compelling due to its strategic location, high-grade uranium and the enticing disparity between its net asset value and market cap. As a Seeking Alpha contributor recently pointed out, the combined net asset value for all of the miner’s projects is around $2 billion, which is nearly twice the company’s market cap.
Like Uranium Energy, DNN is a penny stock with considerable upside potential, albeit greater risk than more established players like Cameco.
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
