The Best Nuclear Energy Stocks to Buy Now

Nuclear energy experienced a significant stagnation following the nuclear reactor disaster of 2011 in Japan. Still, the push towards clean energy and the surge in power demand from data centers that fuel the AI hype have made nuclear energy attractive again. Over 30 governments are considering, planning, or starting power programs according to the World Nuclear Association. Small modular reactors (SMRs) are leading the resurgence of nuclear energy, and investors should consider them for their portfolios.

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What Are Nuclear Energy Stocks?

Nuclear energy stocks are publicly listed companies active in the nuclear energy sector. They primarily operate nuclear reactors to generate electricity. Alternatively, investors can participate in nuclear energy through uranium mining stocks.

Why Should You Consider Investing in Nuclear Energy Stocks?

Nuclear energy is a cornerstone of clean energy, and small modular reactors (SMRs) represent the industry’s most significant breakthrough. They can address the tremendous energy demand posed by data centers and AI. Forecasts estimate nuclear energy investment to exceed $2 trillion by 2050. With energy needs rising, energy security constituting a national security concern for most countries, and the need to lower carbon emissions, nuclear energy has a bright future.

Here are a few things to consider when evaluating nuclear energy stocks:

• Invest in nuclear energy stocks that have signed deals with some of the most notable end-users like tech giants Meta Platforms, Microsoft, Amazon, and Alphabet
• Analyze next-generation nuclear energy stocks that can power the future with disruptive technologies, including nuclear fusion reactors
• Mix your nuclear energy portfolio with established nuclear energy stocks, uranium miners, and next-generation players to diversify your exposure

What Are the Downsides of Nuclear Energy Stocks?

Uranium miners may struggle to meet demand, and uranium prices are volatile. Despite its clean energy appeal, opponents will try to derail or limit its potential due to concerns about nuclear waste and its environmental impact, which pose significant storage challenges. Nuclear energy experienced three major catastrophes: Chernobyl (1986), Three Mile Island (1979), and Fukushima (2011). Therefore, pushback against new nuclear reactors could delay deployment.

Here is a shortlist of attractive nuclear energy stocks:

• Duke Energy (DUK)
• Dominion Energy (D)
• Centrus Energy (LEU)
• Public Service Enterprise Group (PEG)
• NuScale Power (SMR)
• Vistra (VST)
• GE Vernova (GEV)
• Constellation Energy (CEG)
• Cameco (CCJ)
• BWX Technologies (BWXT)

An Update on Our Previous Best Nuclear Energy Stocks to Buy Now

In our previous installment, I highlighted the upside potential of Duke Energy and Dominion Energy.

Duke Energy (DUK) - A long position in DUK between 117.00 and 121.33

DUK advanced over 8% before retreating. It has remained in positive territory since my call, and I am holding my position.

Dominion Energy (D) - A long position in D between 57.78 and 59.05

D moved higher by over 8%, erased all gains, and surged again after its earnings release. I have closed my long position at 61.50 for a gain of roughly 6.50% as a bearish price channel has formed.

Centrus Energy Fundamental Analysis

Centrus Energy (LEU) supplies nuclear fuel for use in nuclear power plants. It also develops centrifuge technology to produce enriched uranium. It is the only US company to produce high-assay, low-enriched uranium (HALEU).

So, why am I bullish on LEU despite its 45%+ plunge?

Expectations were too high, driven by AI data center demand, so a 30% year-over-year revenue increase missed estimates. Still, the preceding plunge created an excellent buying opportunity, and I am bullish on its unique market position to supply HALEU to small modular reactors (SMRs). LEU keeps HALEU production low, and I see a supply-demand imbalance boosting HALEU prices.

Centrus Energy Fundamental Analysis Snapshot

The price-to-earnings (P/E) ratio of 39.54 makes LEU an expensive stock. By comparison, the P/E ratio for the S&P 500 is 30.45.

The average analyst price target for LEU is 276.25. It suggests moderate upside potential with manageable downside risks.

Centrus Energy Technical Analysis

• The LEU D1 chart shows price action breaking down below its ascending Fibonacci Retracement Fan
• It also shows Centrus Energy approaching its horizontal support zone with fading bearish trading volumes
• The Bull Bear Power Indicator is bearish with a positive divergence

My Call

I am taking a long position in LEU between 246.00 and 269.00. The recent share price collapse was an overreaction, and I remain bullish, based on Centrus Energy’s excellent operational metrics. It has a unique market position in the SMR trend, and bullish catalysts emerged following its correction.

Public Service Enterprise Group Fundamental Analysis

Public Service Enterprise Group (PEG) is a public utility that operates three nuclear reactors in New Jersey. It is also a component of the Dow Jones Utility Average and the S&P 500.

So, why am I bullish on PEG after its breakout?

Third-quarter earnings beat estimates for revenues of $2.73 billion and earnings per share of $1.01 by reporting $3.23 billion and $1.13, respectively. I remain bullish on its ongoing margin expansion, with net profit margins rising from 16.1% to 17.8%, and its grid modernization efforts centered on infrastructure resilience. Its clean energy programs ensure a diversified electricity mix ready to meet rising demand.

Public Service Enterprise Group Fundamental Analysis Snapshot

The price-to-earnings (P/E) ratio of 19.81 makes PEG an expensive stock in its sector, but inexpensive compared to the S&P 500. By comparison, the P/E ratio for the S&P 500 is 30.45.

The average analyst price target for PEG is 90.91. It suggests moderate upside potential with reasonable downside risks.

Public Service Enterprise Group Technical Analysis

• The PEG D1 chart shows price action trading between its descending 0.0% and 38.2% Fibonacci Retracement Fan levels.
• It also shows Public Service Enterprise Group breaking out above its horizontal support zone.
• The Bull Bear Power Indicator is bearish with an ascending trendline.

My Call

I am taking a long position in PEG between 81.25 and 82.91. The industry-leading return on assets and equity, expanding profit margins, and grid modernization efforts should drive future revenue growth. I expect another blockbuster earnings report for the fourth quarter.

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