ESG Investors are Bullish on Nuclear Energy Stocks

Those of us who grew up in the 60s and 70s have a difficult time wrapping our heads around nuclear energy being a “green” solution for power generation. We remember the fear-based politics of the Cold War, the meltdown at Three Mile Island, and the devastation of Chernobyl. We forget that all happened prior to 1990. Nuclear technology has evolved.

Nuclear power generation produces zero emissions, unlike the coal fired plants that released 1,241 million metric tons of CO2 into the environment last year. That’s in addition to lead, uranium, carbon monoxide, and sulfur dioxide. According to environmentalists, coal is responsible for 72% of total greenhouse gas (GHG) emissions from the electricity sector.

ESG investors are bullish on nuclear energy stocks. They meet the criteria for the “E,” and have been producing strong returns for several years now. As our nation and the rest of the world continues to migrate to clean energy solutions, this is a sector worth looking at. Nuclear power plants can easily outproduce solar and wind farms.

Uranium ETFs Beat S&P Performance by a 3:1 Margin

I feel like I’ve been writing this comparison a lot recently. Let’s face it. The S&P isn’t performing all that well this year, at least not when you compare it to some of the sectors we’ve been analyzing. For instance, the SPDR S&P 500 ETF Trust (SPY) is up 17.16% YTD. The Global X Uranium ETF (URA) is up 53.45% over that same time frame. That’s a 3:1 margin.

It gets better. Check out the North Shore Global Uranium Mining ETF (URNM) and the Horizons Global Uranium Index ETF (HURA). URNM is up 78.98% YTD and HURA is showing a cool 68.31% return. The numbers are literally “going nuclear” this year. This is the first time I’ve looked at this sector and I sincerely wish someone had told me about it sooner.

If you prefer individual stocks, take a look at Cameco Corp (CCJ). The Saskatchewan-based uranium company is showing a 62.14% return this year and is trading at $21.71 as of this writing. According to the Motley Fool, RBC Capital and GLJ Research both increased their price target on Cameco earlier this month. CCJ has responded with a 30-day gain of 14%.

I’ve rarely seen a sector produce this well outside of a major bull market, but I did finally find a uranium stock that showed a bit of a loss recently. Energy Fuels Inc (UUUU) is down 2% today. They’re up 75% for the year, so take this opportunity to buy some shares. I did. The stock is trading at $6.88. One year ago, the price was $1.74. Can you see why I’m excited?

Nuclear Energy is Clean, Safe, and Sustainable

Coal is dirty and pollutes our atmosphere. Nuclear energy burns clean and produces zero carbon emissions. It requires a smaller geographical footprint and is considered by most in the scientific community to be the safest way to generate electricity. It’s far more sustainable than wind or solar because it can’t be adversely affected by the weather.

Why aren’t we seeing a bigger push for more nuclear power? There are fifty new nuclear plants being built around the world right now, but only two of them are in the United States. That could change if Congress passes the new infrastructure bill, which contains provisions for nuclear development. We’ll keep an eye on that for you in the coming weeks.

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About the Author

ESG Investors are Bullish on Nuclear Energy Stocks

Kevin Flynn

Kevin D. Flynn is InvestorsPrism's Editor-Financial Markets. A former financial professional and founder of AdvisorScale Financial Writing, Kevin lives in Leominster, Massachusetts with his wife Evelyn, two cats, and nine wonderful grandchildren.