According to a Goldman Sachs report, AI could spark a 160% increase in data center power demand. On one hand, the amount of power consumed underscores the rising utility of digital intelligence. However, without making the power grid more resilient, modern societies face a serious dilemma. In the domestic front, The Washington Post warned that America is running out of power.
What makes nuclear energy so compelling is the science; basically, no other resource commands as much energy density as nuclear fuel. In fact, one uranium fuel pellet creates as much energy as one ton of coal or 149 gallons of crude oil.
So long as societies push AI, there will almost certainly be a need for nuclear-energy-related solutions. With that, below are some of the best uranium stocks to consider.
BHP (BHP)
While not a pure-play example, BHP (NYSE:BHP) arguably makes a solid case for best uranium stocks. One of the world’s biggest basic material companies, BHP extracts a variety of natural resources. Primarily, the company operates through its copper, iron ore and coal business units. However, within the broader corporate umbrella, the metals and mining firm features a robust uranium segment.
It’s not a particularly exciting enterprise. Still, a key advantage regarding BHP stock is the underlying diversity. In addition to uranium and its mainline businesses, the company also focuses on the production of zinc, molybdenum, silver and gold. The latter two assets should see a swing higher, especially if the Federal Reserve decides to lower interest rates. That would have inflationary implications, thus supporting the broader commodities space.
In the most recent quarter, BHP posted revenue growth (year-over-year) of 5.7%. Looking out to year’s end, experts believe that sales may reach $56.04 billion. If so, that would be a gain of 4.1% from the prior year. Combined with a forward dividend yield of 5.46%, BHP is an attractive candidate for best uranium stocks.
Cameco (CCJ)
Based in Canada, Cameco (NYSE:CCJ) is a powerhouse among the best uranium stocks. Primarily, the company is involved in the exploration, mining, milling, acquisition and sales of uranium concentrate. Further, Cameco features a fuel services unit which engages in the refining, conversion and fabrication of uranium concentrate.
Financially, the company has admittedly been unsteady in recent quarters. In the past year since the first quarter, Cameco posted an average earnings per share of 12 cents. However, it missed the collective consensus view of 14 cents. Still, some context is necessary. While Cameco missed its bottom-line targets in Q2, Q4 and Q1 2024, its Q3 performance yielded an earnings surprise of 166.7%.
Right now, CCJ stock trades at 10.96X trailing-year sales. Objectively speaking, that’s high for the industry. However, between Q1 2023 to Q1 2024, the average price-to-sales ratio landed at 9.48X. So, the premium isn’t too terrible.
Plus, analysts anticipate that by year’s end, revenue could hit $2.21 billion. If so, that would represent a 17.7% lift from last year’s haul of $1.89 billion.
Energy Fuels (UUUU)
One of the best uranium stocks for pure speculation, Energy Fuels (NYSEAMERICAN:UUUU) isn’t appropriate for every investor. With a market capitalization of under $1 billion, Energy Fuels is small: it has only 159 full-time employees. That said, it’s an intriguing enterprise, which is focused on the extraction, recovery, recycling and exploration of uranium mineral properties in the U.S.
This domestic focus could be a positive long-term catalyst. Kazakhstan is the world’s largest uranium producer. However, the Central Asian country isn’t the most reliable partner. Plus, it has relatively close ties with Russia, an adversarial nation. Therefore, boosting domestic production of critical resources can help both Energy Fuels and the broader goal of total energy independence.
Still, the company has many risks, one of which is the valuation. Currently, shares are priced at 20.75X trailing-year sales, which is sky high. However, analysts are expecting fiscal 2024 sales to hit $70.06 million, implying an 84.7% lift from last year.
That should help with the valuation. Also, by fiscal 2025, revenue might soar to $225.13 million, up 221.3%. Again, it’s one of the best uranium stocks for speculation.
On the date of publication, Josh Enomoto 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.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. Tweet him at @EnomotoMedia.