The nuclear power industry seems to have got a fresh lease on its life. The Russian invasion of Ukraine has caused a spike in fossil fuel prices and a power crisis on a global scale. Before this, multiple countries had either shut down nuclear reactors or were planning to do so in the coming years. But the global energy crisis has caused lawmakers worldwide to reconsider the sustainability of nuclear energy. Even Japan recently announced to not only restart its idle reactors but to build new ones as well. Many European countries have also scrubbed their plans to shut down nuclear reactors while others plan to build new ones. Amidst this shift towards nuclear energy, Uranium, which is vital to nuclear energy production is also gaining momentum. Hence, here we have compiled a list of the best uranium stocks to invest in for the long term. These uranium stocks will surely bring profits to their owners as the nuclear power industry regains its footing and reach new heights.
Cameco Corporation (CCJ)
Up first on our list of best uranium stocks is a Canadian blue chip play in uranium, Cameco Corporation (CCJ). Cameco is the largest publicly traded uranium company in the world. It produces and distributes uranium and fuel services to nuclear utilities in Europe, Asia, and the Americas. The company has 455 million pounds of proven and probable mineral reserves. On an annual basis, Cameco has the licensed capacity to produce over 53 million pounds of uranium concentrates. Not only this, but the company believes to own some of the best-undeveloped uranium projects in the world.
The financial profile of the company is also very impressive. In the latest earnings report, Cameco came out with adjusted earnings of $72 million against a loss in the comparable period. Revenues rose by a nice 55.4% to $558 million. The company also boasts an untapped $1 billion revolver on top of its cash and equivalents of $1.4 billion. Moreover, Cameco also pays a forward dividend yield of 0.33%.
According to the company, it has increased its stake in the Cigar Lake Joint Venture to 54.547%, which is a world-class uranium mine in Canada. This increased stake will enable Cameco to sell 24 million to 26 million pounds of uranium in 2022 with projected sales between $1.73 billion and $1.88 billion. This would definitely be a nice increase from annual revenue of $1.4 billion in 2021. Given the financial standing and projections, Cameco is well-positioned to make huge gains off the burgeoning market opportunity. And it is most certainly a uranium stock to invest in for the long term.
Uranium Energy Corp. (UEC)
Up next is America’s leading, fastest-growing, uranium mining company on the NYSE American, Uranium Energy Corp. (UEC). Uranium Energy is a pure-play uranium company. The company is advancing the next generation of low-cost, environmentally friendly ISR (In situ recovery) mining uranium projects. Its two ISR hub and spoke platforms in South Texas and Wyoming are production ready while the other seven U.S. ISR uranium projects have all major permits in place. In addition, Uranium Energy has some diversification benefits due to its projects in Paraguay and Canada.
The company holds a vast uranium inventory of 1.7 million pounds and approximately 42 million pounds of uranium at its Wyoming projects. Uranium Energy amassed the inventory through various acquisitions, including that of the American arm of Russia’s Uranium One in December 2021. And recently, it completed the acquisition of UEX Corp, an exploration and development company in Canada, to add to its assets.
Not just an increasing asset portfolio, but the company also has a healthy balance sheet with $182 million in cash and liquid assets. Thus, with its production-ready resource base and strong balance sheet, Uranium Energy surely looks like a potential value creator. The demand outlook for nuclear power is only expected to fuel its progress further ahead. And at a price of just under $5, UEC stock presents a very attractive buying opportunity before its booms for investors who are looking at the best uranium stocks.
Centrus Energy Corp. (LEU)
The next stock on our list is an American supplier of nuclear fuel and services, Centrus Energy Corp. (LEU). Centrus comes with an edge over its peers, as it is the only company in the U.S licensed to produces High-Assay, Low-Enriched Uranium (HALEU). HALEU is an essential component for advanced nuclear power plants to achieve smaller designs with more power, longer core lives, increased efficiencies, and improved fuel utilization. The company is currently under a $154 million shared-cost contract with the U.S. Department of Energy’s Office of Nuclear Energy. So far, Centrus has continued to meet all the milestones under the contract.
On the financial front, the company is doing pretty well with an order book of around $1 billion. Its long-term contracts extend up to 2029 which safeguards the company against short-term volatility. In the first half of 2022 alone, Centrus secured over $135 million of new sales contracts and commitments. In the latest earnings report, the company showed a nice improvement of nearly 60% in its topline while diluted earnings per share grew by more than 317% year-over-year. The quarterly revenue was $99.1 million with adjusted earnings of $2.51 per share, which is a very handsome stat for investors looking at the best uranium stocks.
All in all, Centrus is a uranium stock with much to offer. In the long run, this stock could prove to be a multibagger for its holders with its additional advantage of HALEU.
Energy Fuels Inc. (UUUU)
Up next is Colorado-based Energy Fuels Inc. (UUUU), which claims to be the largest uranium producer in the U.S. since 2017. Energy Fuels owns the only licensed uranium mill in the country in addition to its projects and operations in Wyoming, Colorado, Texas, New Mexico, and Arizona. The company also specializes in rare earth elements which are crucial to electric vehicle batteries, fiber optics, cell phones, and wind turbine magnets. Energy Fuels recently secured a major rare earth land position in Brazil to feed its quickly emerging U.S.-based rare earth element supply chain.
Making the company a further attractive investment for the best uranium stocks are its inventories of 28.6 million including uranium and vanadium. Energy Fuels also has a robust balance sheet with $134 million in working capital which includes $86.4 million in cash. Moreover, in the second quarter of 2022, the company secured three long-term contracts with U.S. nuclear utilities. The total delivery quantity under the contracts is up to 4.2 million pounds of uranium between 2023 and 2030. Energy Fuels also expect to begin production at one or more of its uranium mines in the next two years.
Thus, Energy Fuels makes a very interesting and attractive buy for the long term as it has paws in both uranium and rare earth elements sectors. With the uranium sector bouncing back, the company’s expanding operations in this sphere would prove extremely beneficial.
Uranium Royalty Corp. (UROY)
And the final stock on our list of best uranium stocks for today is Uranium Royalty Corp. (UROY). This company claims to be the world’s only uranium-focused royalty and streaming firm. It provides investors with uranium commodity price exposure through strategic acquisitions in uranium interests and companies as well as through holdings of physical uranium.
Uranium Royalty has been expanding its business with purchases and acquisitions in both uranium projects and its physical holdings. Recently, the company expanded its physical uranium holdings with the additional uranium concentrate purchase commitments of 200,000 pounds. This brings its total physical uranium inventories to 1,548,068 pounds with future purchase commitments of 500,000 pounds through 2025. Moreover, Uranium Royalty also acquired an additional 1% gross revenue royalty interest on the Lance In-Situ Recovery (ISR) uranium mine in Wyoming.
In its recent annual report covering the quarter that ended April 30, 2022, total assets jumped by over CAD100 million. On the other hand, liabilities expanded by only CAD13 million. While the company lacks a revenue base, its operating loss of CAD5.6 million was not too bad since it’s a start-up on all assessment bases. Although Uranium Royalty has yet to return a profit, its business model is drawing much attention. With further contracts on the way, it is most certainly setting itself up for success as the industry regains its place and continues to rise.
