The hit movie Oppenheimer has reignited the general public’s interest in nuclear stocks. While the events of that movie may have occurred long ago, nuclear energy stocks are still on the cutting edge of development today.
That’s because humanity is rushing to deploy affordable carbon-free energy solutions. Recent extreme weather has heightened the urgency for developing these alternatives. And while wind and solar have their merits, their lack of always-on capacity makes them rather fickle options for baseload generation. Nuclear, by contrast, is cheap, reliable, and works in all weather conditions.
Today, there are roughly 440 nuclear power reactors in operation around the world. And for the first time in many years, there is a concerted rush to build more — roughly 60 additional reactors are under construction. This makes it a great time to look at these three undervalued nuclear power stocks to buy.
BWX Technologies (BWXT)
BWX Technologies (NYSE:BWXT) is something of a one-stop shop for nuclear power technology and solutions.
The company is well-known for its expertise in designing and producing nuclear reactors for the military; it has delivered more than 400 reactors to the U.S. Navy over the years. BWX is a big player in commercial power as well, delivering more than 300 steam reactors to nuclear power plants. It manages a dozen highly-important atomic sites for the U.S. government, as well.
Arguably one of the most interesting applications of nuclear is in next-generation medicine. BWX should be a beneficiary of America’s aging demographics as it manufactures medical isotopes and supplies products for diagnostic imaging and radiotherapeutic treatments.
BWXT stock recently rallied to 52-week highs thanks to an earnings report where top-line revenue growth dramatically exceeded analyst expectations. Even after the run-up in BWXT stock, shares remain attractive as it is a long-term winner with multiple angles to profit from the current nuclear renaissance.
Cameco (CCJ)
Cameco (NYSE:CCJ) is one of the world’s dominant uranium mining companies, with operations spanning many countries and sites.
The nuclear power business had been in a long slump following the Fukushima nuclear power plant accident. However, nuclear is enjoying a comeback now as its cheap and carbon-free energy is particularly appealing given current geopolitical and climatological trends. In particular, Russia’s invasion of Ukraine emphasized the importance of moving away from Russian-sourced fossil fuels; uranium makes a great alternative.
Cameco’s revenues had fallen from $1.5 billion in 2018 to a low of just $1.2 billion in 2021 and profits sagged as well. However, a full-on revival is underway, with analysts projecting that Cameco’s revenues will leap to $1.8 billion in 2023 and $2.1 billion. Demand was already exceeding supply, and a recent coup in the uranium-producing country of Niger could fuel further upside for both the price of uranium and CCJ stock.
TC Energy (TRP)
TC Energy (NYSE:TRP) is a diversified energy giant primarily known for its oil and natural gas pipelines. And that’s fair, given the importance of those assets to TC’s portfolio.
However, TC is also a leading player in Canada’s power industry thanks to its nuclear generation capacity. TC has investments in seven power generation facilities producing 4,200 megawatts (MW) of power. That’s enough to power roughly four million homes. Included in this is Bruce Power, the gargantuan nuclear power facility that produces 30% of Ontario’s power. TC owns 48.4% of Bruce Power.
Next year, TC plans to spin off its slower-moving oil pipelines business. This will give investors in the remaining company a faster-moving business with more exposure to TC’s nuclear and other cleaner energy infrastructure. TRP stock has gotten hammered over the past year; as a result, shares now offer an electrifying 7.4% dividend yield.
On the date of publication, Ian Bezek held a long position in BWXT and TRP stock. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
