In this article, we discuss 10 nuclear energy stocks to buy now.
The nuclear power plant and equipment market generated $41.1 billion in 2020, and is estimated to reach $58.4 billion by 2030, a CAGR of 3.5% from 2021 to 2030.
Nuclear Energy Market Outlook
Demand for energy continues to rise across the world. Average yearly new nuclear capacity of 20 GW is required between 2020 and 2050 to meet net zero goals. Nuclear energy can have multiple applications, rather than being used solely for the generation of electricity. Applications for non-electric nuclear energy include district heating, water desalination, industrial process heat applications, ship propulsion, space applications, and other innovative applications.
In 2020, Asia-Pacific dominated the global nuclear power and equipment market, and it is projected to remain the fastest growing region during the forecast period of 2021–2030. This is due to high demand for power in this region, since power shortages and relentless smog in countries like India and China are shifting the focus on clean energy, specifically nuclear energy.
Fortune reported on February 28 that the Biden administration is bullish on nuclear power to solve the climate crisis. The White House requested $1.8 billion for nuclear energy in its fiscal 2022 budget, a 50% increase from last year’s levels. The Build Back Better bill also includes around $20 billion-$25 billion for subsidizing older nuclear reactors. The Biden administration believes that the 94 American nuclear reactors will be “absolutely essential” to realize its ambition of a net-zero economy by 2050.
Power generation is shifting from oil and gas towards alternative sources like nuclear energy amid the Russian attack on Ukraine, and some of the most notable nuclear energy companies in focus as of 2022 are Centrus Energy Corp. (NYSE:LEU), BHP Group Limited (NYSE:BHP), and Rio Tinto Group (NYSE:RIO).
Our Methodology
After a careful assessment of the nuclear energy market, we selected companies that are involved in nuclear power adoption and uranium mining. These stocks have surged in double-digits over the last year. Data from around 924 elite hedge funds tracked by Insider Monkey in Q4 2021 was used to assess the hedge fund sentiment around the stocks.
Nuclear Energy Stocks to Buy Now
10. Fission Uranium Corp. (OTC:FCUUF)
Number of Hedge Fund Holders: N/A
Fission Uranium Corp. (OTC:FCUUF) is located in the Athabasca Basin uranium district in Canada, developing top quality, near-surface Triple R uranium deposit. With the Russian invasion of Ukraine, Fission Uranium Corp. (OTC:FCUUF) is positioned to benefit as the market begins to favor alternative energy sources over oil and gas. The stock has gained 58.70% over the last 12 months, making it a notable nuclear energy stock to buy now.
Canaccord analyst Katie Lachapelle raised the price target on Fission Uranium Corp. (OTC:FCUUF) on September 23 to C$1.10 from C$0.80 and kept a Speculative Buy rating on the shares.
In addition to Centrus Energy Corp. (NYSE:LEU), BHP Group Limited (NYSE:BHP), and Rio Tinto Group (NYSE:RIO), Fission Uranium Corp. (OTC:FCUUF) is positioned to benefit from the surging nuclear power market.
9. Western Uranium & Vanadium Corp. (OTC:WSTRF)
Number of Hedge Fund Holders: N/A
Western Uranium & Vanadium Corp. (OTC:WSTRF) produces uranium and vanadium mineral assets in western Colorado and eastern Utah. The company acquired additional uranium properties and ablation technology by acquiring Black Range Minerals Limited in September 2015. The company is headquartered in Toronto, Canada. The stock has surged 34.17% over the last 12 months, making it a notable investment candidate in the nuclear energy market.
In a company update on February 14, Western Uranium & Vanadium Corp. (OTC:WSTRF) reported that its Sunday Mine Complex project that aimed to develop the GMG Ore Body was a success, and the company mined 39,800 lbs of uranium and 239,000 lbs of vanadium. At current market prices, the post-processing recovery value is over $3.5 million.
Western Uranium & Vanadium Corp. (OTC:WSTRF) also reported on February 8 that it received its first royalty payment for oil and gas production from a property located in Weld County Colorado. This first royalty payment was $207,552, in line with estimates.
8. Uranium Royalty Corp. (NASDAQ:UROY)
Number of Hedge Fund Holders: N/A
Uranium Royalty Corp. (NASDAQ:UROY) is a company interested in exposure to uranium prices by making tactical investments in uranium interests, managing a portfolio of geographically diversified uranium projects that may be acquired directly from mine operators and third party holders of existing royalties. The stock has surged 83.47% over the last year, making it a notable contender in the nuclear energy space.
On December 2, Uranium Royalty Corp. (NASDAQ:UROY) entered into a Supply Stream Agreement with CGN Global Uranium to purchase 500,000 pounds of U3O8, a uranium compound, from 2023 through 2025 at a weighted average price of $47.71 per pound.
Canaccord analyst Katie Lachapelle raised the price target on Uranium Royalty Corp. (NASDAQ:UROY) on October 20 to C$7.50 from C$7 and kept a Speculative Buy rating on the shares.
7. Ur-Energy Inc. (NYSE:URG)
Number of Hedge Fund Holders: 5
Headquartered in Colorado, Ur-Energy Inc. (NYSE:URG) operates as an exploration-stage mining company. Ur-Energy Inc. (NYSE:URG) specializes in uranium mining and recovery operations, with uranium mineral resources mainly located in Wyoming. The stock rose 46% over the past 12 months.
On November 11, Alliance Global Partners analyst Jake Sekelsky raised the price target on Ur-Energy Inc. (NYSE:URG) to $2.50 from $2.20 and kept a Buy rating on the shares after the company published its Q3 results. Given the recent strength in the uranium market, management made the strategic decision to initiate a development program at Lost Creek, the analyst told investors in a research note. He views this as an “important step” and believes Ur-Energy Inc. (NYSE:URG) is well positioned to become a domestic producer of uranium quickly once a positive restart decision is made.
Among the hedge funds tracked by Insider Monkey, 5 funds were bullish on Ur-Energy Inc. (NYSE:URG) at the end of December 2021, with combined stakes of $12.6 million. Michael Hintze’s CQS Cayman LP held the biggest stake in the company, with 8.8 million shares worth $10.7 million.
Ur-Energy Inc. (NYSE:URG) is a notable contender in the nuclear energy market, just like Centrus Energy Corp. (NYSE:LEU), BHP Group Limited (NYSE:BHP), and Rio Tinto Group (NYSE:RIO).
6. Centrus Energy Corp. (NYSE:LEU)
Number of Hedge Fund Holders: 7
Centrus Energy Corp. (NYSE:LEU) is a Maryland-based company that provides nuclear fuel to nuclear power plants. The stock surged 75.53% over the last year, making it one of the top nuclear energy stocks to buy now.
Roth Capital analyst Joe Reagor upgraded Centrus Energy Corp. (NYSE:LEU) on December 21 to Buy from Neutral with a price target of $58, up from $57. The company’s redemption of all of its outstanding Series B preferred stock is a “small benefit to the valuation”, the analyst told investors in a research note. He also believes Centrus Energy Corp. (NYSE:LEU)’s valuation “reflects fundamentals again” and looks for improved operating results in 2022.
On December 14, Centrus Energy Corp. (NYSE:LEU) and Clean Core announced that they have been working together to promote Clean Core’s advanced nuclear fuel, which will combine thorium with high-assay, low enriched uranium produced by Centrus Energy Corp. (NYSE:LEU) and promote the use of ANEEL advanced nuclear fuel in CANDU reactors around the world.
According to the Q4 database of Insider Monkey, 7 hedge funds were bullish on Centrus Energy Corp. (NYSE:LEU), with stakes equaling roughly $23 million, up from 2 funds in the quarter prior, holding stakes in Centrus Energy Corp. (NYSE:LEU) worth $14.1 million.
Here is what Old West Investment Management has to say about Centrus Energy Corp. (NYSE:LEU) in their Q4 2020 investor letter:
“The uranium mining industry had been in a severe downturn for nearly a decade, and now that the cycle has turned we believe a multiyear bull market lies ahead. If you recall from our most recent investor letter, Brian did a writeup of Centrus Energy. At the time of that letter Centrus was trading at $9 per share. It finished the year at $23.”
5. Uranium Energy Corp. (NYSE:UEC)
Number of Hedge Fund Holders: 10
Uranium Energy Corp. (NYSE:UEC) is a leading American uranium mining company that processes uranium and titanium concentrates in the United States, Canada, and Paraguay. The company was incorporated in 2003 and is based in Corpus Christi, Texas.
H.C. Wainwright analyst Heiko Ihle on November 10 raised the price target on Uranium Energy Corp. (NYSE:UEC) to $7 from $5.60 and kept a Buy rating on the shares after the company announced that it had entered into a definitive share purchase agreement with Uranium One Investments.
Uranium Energy Corp. (NYSE:UEC) announced on January 31 that the company repaid the remaining $10 million balance of its secured credit facility and is now completely debt free.
Among the hedge funds tracked by Insider Monkey in Q4 2021, 10 funds were bullish on Uranium Energy Corp. (NYSE:UEC), with collective stakes valued at $15.7 million. Marshall Wace LLP is the largest stakeholder of the company, with 2.2 million shares worth $7.60 million.
4. NexGen Energy Ltd. (NYSE:NXE)
Number of Hedge Fund Holders: 15
NexGen Energy Ltd. (NYSE:NXE) is a Vancouver-based company that explores and develops uranium properties in Canada. The stock has gained 39% in the last year, and the company stands to benefit from the shift from oil and gas to alternative energy sources like uranium amid the Russian attack on Ukraine.
On January 14, TD Securities analyst Craig Hutchison lowered the price target on NexGen Energy Ltd. (NYSE:NXE) to C$9.50 from C$10 and kept a Speculative Buy rating on the shares.
In the fourth quarter of 2021, 15 hedge funds reported owning stakes in NexGen Energy Ltd. (NYSE:NXE), with combined stakes amounting to $67.5 million, as compared to 19 funds in the prior quarter, owning stakes in NexGen Energy Ltd. (NYSE:NXE) worth $60.5 million. Falcon Edge Capital is the leading stakeholder of NexGen Energy Ltd. (NYSE:NXE), with 3.3 million shares worth $14.4 million.
3. Denison Mines Corp. (NYSE:DNN)
Number of Hedge Fund Holders: 17
Denison Mines Corp. (NYSE:DNN) is a uranium exploration and development company based in Toronto, Canada. The company’s flagship project is the 95% interest owned in the Wheeler River uranium project in the Athabasca Basin region in northern Saskatchewan.
On January 13, Denison Mines Corp. (NYSE:DNN) executed a repayment schedule agreement with Uranium Industry wherein the parties negotiated the debt repayment owing from UI to Denison Mines Corp. (NYSE:DNN), and Denison Mines Corp. (NYSE:DNN) received an initial $2 million debt repayment installment in accordance with the agreement terms. The total amount due to Denison Mines Corp. (NYSE:DNN) under the agreement, including the initial $2 million already received, is approximately $16 million.
According to the fourth quarter database of Insider Monkey, 17 hedge funds were bullish on Denison Mines Corp. (NYSE:DNN), up from 14 funds in the preceding quarter. Titan Global Capital is the largest shareholder of the company, with 6.3 million shares worth $8.73 million.
2. BHP Group Limited (NYSE:BHP)
Number of Hedge Fund Holders: 21
BHP Group Limited (NYSE:BHP) is a mining company based in Melbourne, Australia, that has interests in uranium properties and other sources of energy across Australia, Europe, China, Japan, India, South Korea, North America, South America, and internationally.
On February 23, BHP Group Limited (NYSE:BHP) declared a $3.00 per share semi-annual dividend, a 25% decrease from its prior dividend of $4.00. The dividend is payable on March 28, to shareholders of record on February 25.
Berenberg analyst Richard Hatch on February 23 raised the price target on BHP Group Limited (NYSE:BHP) to £2,300 from £2,200 and kept a Hold rating on the shares.
A total of 21 hedge funds were bullish on BHP Group Limited (NYSE:BHP) in Q4 2021, up from 21 funds in the prior quarter. Fisher Asset Management held the biggest stake in BHP Group Limited (NYSE:BHP), with 7.80 million shares worth approximately $471 million.
Here is what Harding Loevner has to say about BHP Group (NYSE:BHP) in its Q1 2021 investor letter:
“Our purchase of Australian mining company BHP is an example of a quality company at a moderate valuation that should deliver attractive long-term returns. We believe the market has undervalued its enduring competitive advantage due to its low cost iron and copper mining operations which has allowed the company to deliver consistent profits and cash flows across the inevitable ups and downs of the global metals cycle. While the variability of commodity prices prevents BHP from scoring in the top ranks of measured quality, we are willing to bear some of that uncertainty in return for a more attractive valuation given the company’s strong business fundamentals.”
1. Rio Tinto Group (NYSE:RIO)
Number of Hedge Fund Holders: 22
Rio Tinto Group (NYSE:RIO) is a multinational leading metals and mining corporation that produces uranium, in addition to iron ore, copper, diamonds, and gold.
On February 23, Rio Tinto Group (NYSE:RIO) declared a $7.93 per share ordinary dividend. The company also declared a special dividend of $2.47 per share, representing a 79% payout.
RBC Capital analyst Tyler Broda on February 24 lowered the price target on Rio Tinto Group (NYSE:RIO) to £5,100 from £5,200 and kept a Sector Perform rating on the shares.
Among the hedge funds tracked by Insider Monkey in the fourth quarter of 2021, 22 funds were bullish on Rio Tinto Group (NYSE:RIO), with collective stakes worth $1.8 billion, up from 20 funds in the prior quarter, holding stakes in Rio Tinto Group (NYSE:RIO) worth $1.3 billion. Arrowstreet Capital is a prominent stakeholder of the company, with more than 8 million shares valued at $543.2 million.
You can also take a look at 10 Undervalued Dividend Kings To Buy In 2022 and These 10 Companies Just Increased Their Dividends By Over 10%.
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Disclosure: None. 10 Nuclear Energy Stocks to Buy Now is originally published on Insider Monkey.
