Investing 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 signs that it could be making a comeback have led to surging uranium prices in recent months.
In this article, we will examine the prospects of a nuclear energy renaissance, highlight some top uranium stocks which could benefit from this and demonstrate how to invest in uranium stocks!
Table of Contents
Investing in Uranium
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 a recent update to its Net Zero Roadmap, the International Energy Agency (IEA) stated that, in its net zero scenario, nuclear power capacity more than doubles by 2050.
The necessity to reduce fossil fuel consumption, coupled with concerns regarding energy security in the wake of the war in Ukraine, has renewed interest in nuclear energy. This has subsequently led to an increase in demand for uranium and caused prices to rise significantly in 2023.
So, what does this mean for uranium mining stocks? Naturally, they have benefitted from increasing uranium prices, with share prices of many uranium companies soaring in 2023. But what are the best uranium companies to watch in 2024?
Best Uranium Stocks to Watch
In the following sections, we will look at 3 uranium stocks for investors who are interested in investing in uranium to consider.
| Cameco Corp |
| Uranium Energy Corp |
| BHP |
Cameco Corp
For those interested in investing in uranium, Cameco is likely to be high on most lists of the best uranium stocks to watch.
Cameco is the world’s largest publicly traded uranium company in terms of market capitalisation. It is also one of the largest uranium stocks in terms of production, accounting for around 12% of total global supply in 2022.
In 2023, as share price surged, Cameco ramped up production by 69% to meet growing demand, and intend to increase production again in 2024. This increase in production helped fuel revenue and net earnings growth, which rose by 39% and 306% respectively.
Uranium Energy Corp
Uranium Energy Corp (UEC) is a US-based uranium mining company, which was founded in 2003 and has a number of projects in North America and Paraguay.
In terms of market cap, UEC is far smaller than Cameco. And in terms of production, well, that’s where it gets interesting. Over the last few years, practically all of UEC’s revenue has been made up by sales of existing inventory. In other words, the company does not appear to have been doing any actual mining.
However, it does have a large inventory of purchased uranium which it built up whilst uranium prices were low. It also successfully increased its production capacity by acquiring a number of uranium mining projects during the bottom of the uranium price cycle with the intention of operating them in the future.
It appears that the future has now arrived, with UEC announcing that its US production will restart in August 2024. This, coupled with a strong balance sheet which boasts more than $300 million in cash and liquid assets and no debt, could make UEC a uranium stock to watch in 2024.
BHP
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. Low prices forced many uranium mining stocks to underproduce in recent years in an attempt to support prices.
Recent rising prices have undoubtedly been positive for the industry. Nevertheless, higher prices incentivise uranium mining companies to ramp up production which, consequently, increases global supply. Eventually, unless demand keeps growing at a faster pace, this can lead to a fall in prices.
Therefore, it can be risky to invest in companies solely dedicated to mining uranium, or solely dedicated to producing any single commodity for that matter. For those 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 third largest in terms of annual revenue. In the year ended 30 June 2023, BHP produced 3.4 million 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 does not leave investors entirely exposed to fluctuating uranium prices.
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 the uranium mining companies highlighted in this article.
Follow these steps to learn how to invest in uranium stocks:
- Open an Invest.MT5 account and log in to the Dashboard.
- Open the web trading terminal.
- Search for the uranium stock you want to buy and click the symbol to open a price chart.
- Create a new order, enter the number of uranium shares and hit 'Buy'!
Investing with Admirals
With an Invest.MT5 account, you can invest in all the uranium stocks highlighted in this article as well as over 4,300 stocks and over 200 Exchange-Traded Funds (ETFs). Click the banner below, in order to open an account:
FAQ
Where is uranium mined?
Uranium is mined in a number of countries around the world, with more than 80% of global production taking place in Kazakhstan, Canada, Namibia, Australia and Uzbekistan.
Which country is the leading producer of uranium?
Kazakhstan is the world’s largest producer of uranium, accounting for 43% of global production in 2022.
Which companies mine the most uranium?
Kazatomprom, which is majority owned by the government of Kazakhstan, is the world’s largest producer of uranium, accounting for 23% of global supply in 2022. The next three largest producers are Cameco, Orano, CGN respectively.
What is the largest uranium mining stock?
Cameco is the largest uranium mining stock by market capitalisation.
How to invest in uranium UK?
UK investors can gain exposure to uranium by investing by purchasing shares in companies which are engaged in uranium mining or via Exchange-Traded Funds (ETFs) which focus on the sector.
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