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Splitting Atoms and Profits: The Nuclear Stocks Heating Up in 2024

With expertise in investment evaluation, Muslim Farooque is a respected voice in stock analytics, featured on InvestorPlace, GuruFocus, BarCharts, and Tipranks.
With expertise in investment evaluation, Muslim Farooque is a respected voice in stock analytics, featured on InvestorPlace, GuruFocus, BarCharts, and Tipranks.

As we enter 2024, nuclear energy gains prominence amid global efforts to tackle climate change and enhance energy security. This shift focuses on exploiting the economic opportunities arising in the nuclear sector, reflecting increased market interest in companies involved in this field.

The rise in uranium stocks, essential for nuclear power, signals the growing demand for this energy source as nations strive to reduce carbon emissions. Investors are closely observing the progress in nuclear technologies, including Small Modular Reactors (SMRs), and the sector is drawing substantial investment.

Nuclear facilities, under the strict oversight of the Nuclear Regulatory Commission (NRC), are seeing considerable capital investment. Entities engaged in the nuclear fuel cycle and those pioneering advanced nuclear technologies are experiencing a rise in stock value as the perception of nuclear energy moves from caution to opportunity.

NextEra Energy (NEE)

NextEra Energy, one of the largest electric utilities in the United States, has seen a significant downturn with a 29% drop in its year-to-date return. Despite the fall, the company’s latest earnings report shows a revenue rise to $7.17 billion, marking a 7% increase.

The increased revenue comes at a time when operating expenses have jumped by 41%, totaling $2.53 billion, influencing a 28% decrease in net income to $1.22 billion. Earnings per share, however, have managed an uptick of 11%.

With its assets expanding by 10% to $171.67 billion, NextEra Energy’s balance sheet remains robust, although its cash and short-term investments have decreased by 37%, landing at $1.57 billion. The company has maintained a strong operational cash flow, seeing a 48% rise to $3.66 billion.

NextEra Energy’s market cap stands at $120.17 billion, and it maintains a P/E ratio of 15.7 with a dividend yield of 3.1%. This financial standing underpins the company’s growth strategy and its capacity to invest in its growing portfolio of nuclear power plants.

Outside of financials, NextEra Energy is actively engaged in enhancing its nuclear and renewables infrastructure. The company’s commitment to a clean energy future is evident through its participation in initiatives that align with government support for the nuclear industry. These efforts are pivotal as electricity demand continues to rise, positioning NextEra Energy advantageously in the energy sector.

Recent non-financial highlights include NextEra Energy’s operational advancements, like the anticipated completion of new projects which are expected to contribute to long-term earnings growth. The company has also remained proactive in environmental, social, and governance (ESG) aspects, receiving positive recognition for its sustainability efforts.

In summary, while NextEra Energy has confronted financial headwinds this year, reflected in its reduced year-to-date return and net income, it compensates with revenue growth and operational cash flow increases. Simultaneously, it is solidifying its position in the nuclear energy space, ready to capitalize on the growing demand for clean electricity, backed by strategic initiatives and government support. This multi-faceted approach suggests that NextEra Energy is not only enduring current market challenges but is also laying the groundwork for future profitability and industry leadership.

Cameco Corp (CCJ)

Cameco’s trajectory this year has been nothing short of meteoric, boasting an 83% year-to-date return. In the latest quarterly earnings, it reported a remarkable net income surge to CAD 148.1 million, an impressive 858% increase. The company’s efficiency is evident in its lean operating expenses, now reduced by 18%, aligning with a robust net profit margin of 26%.

Revenue growth hasn’t taken a back seat, leaping by 48% to CAD 575.1 million. Cameco’s balance sheet reinforces this growth story, with cash and short-term investments nearly doubling to CAD 2.67 billion. Its total assets now stand tall at CAD 8.72 billion, up 17% from the previous year.

As the company navigates the uranium bullish cycle, its financial prudence shines through a prudent effective tax rate of 21.5%. Cameco’s prowess in generating cash is unmissable, with operations churning out CAD 184.8 million, showcasing a robust 497% year-over-year growth. Such figures are a testament to its status as a linchpin in the nuclear stocks category.

Moreover, Cameco has masterfully managed its capital, evidenced by a 4.4% return on capital. Its free cash flow paints a picture of fiscal finesse, soaring to CAD 192.2 million, a 765% upswing. This financial fortitude comes amidst a period where global demand for uranium intensifies, positioning the company as a key player.

Investors eyeing the nuclear sector’s surge will find Cameco’s performance hard to overlook. The company has not only exceeded market expectations with its latest earnings beat but also continues to bolster its contract portfolio. As Cameco secures all regulatory approval alongside Brookfield to purchase Westinghouse, it’s clear that it is not just riding the wave of the uranium resurgence — it’s leading it.

Amidst broader market challenges, Cameco’s commitment to shareholder value remains unwavering, as reflected in its recent dividend declaration. While the company prepares to elevate its uranium production to meet growing customer demand, its operational prowess positions it strategically for the long haul. For those tracking the ebb and flow of nuclear stocks, Cameco’s bright near-term outlook and improving market fundamentals signal a compelling narrative of resilience and growth.

Exelon (EXC)

Exelon’s year-to-date performance presents a nuanced tapestry of financial results. Despite a year-to-date return lagging by 6%, the company’s latest quarterly earnings paint a different picture. Exelon reported a revenue surge to $5.98 billion, marking a substantial 23% year-over-year growth. This expansion in revenue is a testament to Exelon’s robust operational framework and strategic positioning within the nuclear stocks sector.

Operating expenses for the company saw a modest rise of 7%, suggesting effective cost management against a backdrop of revenue gains. Net income edged up to $700 million, a 4% increase, reflecting steady profitability despite market challenges. The company’s commitment to grid modernization and operational efficiencies shines through these figures, signaling potential for long-term value creation.

Net profit margin contracted slightly, signaling the aggressive investment the company is channeling into future growth. Exelon’s earnings per share (EPS) witnessed a decline to $0.67. This figure, though a dip of 11%, aligns with the company’s forward-looking reinvestment strategy. Exelon is poised to ride the wave of utility grid transformation, with such fiscal prudence likely to enhance shareholder value over time.

In the balance sheet arena, Exelon reported total assets at a healthy $99.26 billion, climbing by 6%. The slight increase in total liabilities to $73.79 billion should not overshadow the company’s financial fortitude. Exelon’s strategic corporate transactions, including the introduction of Constellation Energy, hint at a company reshaping its future.

The cash flow statement reveals dynamic financial activity, with operations generating $1.53 billion, up a remarkable 70%. A slight downturn in net change in cash underscores strategic investments that Exelon is making for a resilient future. The company’s adept maneuvering in the face of economic headwinds positions it as a compelling player in the energy sector.

Exelon’s market capitalization stands at $40.37 billion, underscored by a strong dividend yield of 3.5%. With a price-to-earnings (P/E) ratio of 19, the company is in line with sector valuations. The market is beginning to recognize the intrinsic value Exelon holds, particularly as a pure-play transmission firm amidst a pivotal utility grid transformation.

The energy titan’s foothold in the nuclear stocks space, coupled with its resistance to recessions, signifies a stronghold in a volatile market. Investor attention is piqued as Exelon breaks above resistance levels. Analysts anticipate further upside, especially post-Earnings Wednesday insights. The company’s proactive moves, notably its $46.2 million SEC settlement, are steps toward reinforcing investor confidence.

In conclusion, Exelon’s sturdy earnings growth, compelling dividend yield, and transformational grid modernization efforts shape a profile of a company built for resilience and growth. With its eyes set firmly on operational excellence and strategic corporate evolution, Exelon is navigating the currents of market volatility with a steady hand, making it a company worth watching in the investment landscape.

Takeaway Points

  • NextEra Energy (NEE): NextEra Energy is actively expanding its nuclear power plant portfolio, aligning with government initiatives for clean energy.
  • Cameco Corp (CCJ): The company is capitalizing on the bullish cycle in uranium, with strong cash flow generation and strategic acquisitions such as the purchase of Westinghouse.
  • Exelon (EXC): Exelon’s pure-play transmission business model, resilient against recessions, enhances its appeal in a volatile market.
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