How to Invest in Uranium Stocks
Uranium is widely used as fuel for nuclear power plants and, therefore, is a critical component of producing nuclear energy. Nuclear energy has been largely maligned for more than a decade, but there have been recent signs that it may be making a comeback which could, in turn, increase demand for uranium.
In this article, we will examine the prospects of a nuclear energy renaissance, highlight 2 top uranium stocks which could benefit from this, demonstrate how to invest in uranium stocks and much more!
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Is Nuclear Energy Making a Comeback?
In 2011, disaster struck at the Fukushima Daiichi Nuclear Power Plant in Japan. A powerful tsunami, triggered by an equally powerful earthquake, struck the facility, causing damage to the nuclear power plant and resulting in a severe nuclear accident.
In the aftermath of this incident, many countries around the world dialled back plans for nuclear energy, phasing out existing nuclear reactors and abandoning plans to build new ones.
However, more than a decade later, the outlook for the industry seems a lot different. In the wake of soaring oil and gas prices and the ongoing war in Ukraine, the term “energy security” has become a bit of a buzzword recently. Countries around the world are realising that being dependent on energy imports from a handful of countries is far from ideal.
This desire for more domestically produced energy, combined with the fact that nuclear power plants are responsible for far less emissions than fossil fuels, means that nuclear energy could be poised for a comeback - with the UK, France, Poland and China all recently announcing plans to increase nuclear power capacity.
So, what does this mean for uranium mining stocks? Naturally, they would be likely to benefit from an increase in demand for uranium and, in the next section, we reveal two such uranium stocks.
Top Uranium Stocks to Watch
In the International Energy Agency’s (IEA) pathway to net zero by 2050, they call for nuclear power capacity to double over the next three decades. But which uranium stocks could be set to benefit from this?
In the following sections, we will look at 2 uranium stocks for investors who are bullish on investing in uranium to consider. One is a pure-play uranium stock, whereas the second is a more diversified – and, therefore, potentially less risky - option.
For those only interested in investing in uranium, Cameco is likely to be on most lists of uranium stocks to watch. This is simply because, in terms of uranium mining stocks, Cameco is one of the biggest players in the market.
Cameco is one of several uranium mining stocks which has scaled down production in recent years, in an attempt to support prices amidst falling demand for uranium.
In 2021, despite operating at 75% below productive capacity, Cameco produced 6.1 million pounds of uranium, which equated to more than 5% of total global production. This production was only bettered by three companies, two of which are state owned.
However, the company announced in their annual report that, in 2022, they intend to increase production to 11 million pounds and expect to be operating at 40% below productive capacity by 2024.
Needless to say, with the potential to significantly increase their production capacity, Cameco is one of the uranium stocks which could benefit from a potential increase in demand for uranium.
A quick look at the price charts of many uranium stocks will tell you that this is an industry which has struggled in recent years. As we noted in the last section, low uranium prices have forced many uranium mining stocks to underproduce in an attempt to support prices.
Whilst 2021 was more positive, the outlook for the industry remains anything but certain. Therefore, for investors who are optimistic about future demand for uranium but not prepared to put all their eggs in one basket, a more diversified mining stock may be a more suitable option.
BHP is the largest mining company in the world by market capitalisation and the second largest in terms of annual revenue. In the year ended 30 June 2022, BHP produced 2,375 tonnes of uranium, making it one of the largest uranium producers in the world.
Besides uranium, the mining giant also produces iron ore, coal, copper and nickel, meaning that an investment in BHP would not leave investors dependent on the future success of the uranium market.
How to Invest in Uranium Stocks
If, after reading this article, you are considering investing in uranium stocks, you might be interested to know that, with Admirals, you can invest in both uranium stocks highlighted in this article.
Follow these steps to learn how to invest in uranium shares:
- Open an Invest.MT5 account and log in to the Trader's Room
- Find your account in the Dashboard and click ‘Invest’ to open the MetaTrader Web Trading Platform
- Search for the stock you want to buy in the Market Watch on the left of the screen and add one to the list of symbols
- Click and drag the symbol on to the chart window
- Click New Order at the top of the screen, enter the number of uranium shares you want to buy and send the order to the market to buy uranium stocks!
Why Invest in Uranium Mining Stocks with Admirals
With an Invest.MT5 account, you can invest in over 4,300 stocks and over 300 Exchange-Traded Funds (ETFs). Other benefits of the Invest.MT5 account include:
- Opening an account with a minimum deposit of just €1
- Ability to buy fractional shares in 700 of the world’s most exciting companies
- Exclusive access to our Premium Analytics portal
- The comfort of investing with a broker which is authorised and regulated by the UK Financial Conduct Authority (FCA), the Cyprus Securities and Exchange Commission (CySEC), the Jordan Securities Commission (JSC) and other well-known financial regulators
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