Fundamentally, the narrative for top uranium stocks 2024 comes down to basic math. Around mid-December, The Wall Street Journal reported that the commodity was running hot due to supply setbacks. However, as more data entered the news cycle, uranium prices soared as it became clear that the sector’s challenges might not dissipate soon enough.
As a recent CNBC report pointed out, the ecosystem focuses on Kazakhstan. Specifically, its state-run mining enterprise Kazatomprom – the world’s leading uranium miner – stated that it’s likely to fall short of production targets through 2025 due to construction delays along with difficulties securing sulfuric acid. This material is critical in the uranium extraction process.
Further bolstering the top uranium stocks 2024, sector players have little choice but to secure the commodity. Otherwise, their businesses would risk collapse. As well, with a growing global population, demand for energy should increase, not decrease. And if we’re going to pivot toward electric vehicles and other zero-emission protocols, then guess what? Uranium must be part of the answer.
With so many factors pushing the industry, you don’t want to sleep on the opportunity. Below are a few ideas for top uranium stocks 2024.
Before we get into the high-risk, high-reward realm of top uranium stocks 2024, let’s start with a confidence booster. You’re probably not going to get rich with BHP (NYSE:BHP), let’s just be real about that. However, the metals and mining giant probably won’t leave you stranded on the roadside in a hailstorm. Fundamentally, its robust footprint and diversified product portfolio should keep you out of trouble.
If we’re going to look at this from a relative basis, BHP could be de-risked from its prior highs. Financially, the company features above-average three-year revenue and EBITDA growth. It’s also consistently profitable. At the same time, shares trade for only 9.43X forward earnings. In contrast, the sector median stands at 11.43X. Just as well, the company also commands a return on invested capital (ROIC) of nearly 19%.
Notably, in the fiscal year ended June 30, 2023, BHP produced approximately 3.4 million metric tons of uranium. This represented an increase of over one million metric tons from the prior year. Analysts rate shares a moderate buy with the high-side target coming in at $75.
NexGen Energy (NXE)
Based in Vancouver, British Columbia, Canada, NexGen Energy (NYSE:NXE) focuses on becoming a global leader in the “responsible delivery” of uranium for the world’s current and future clean energy needs. That’s an important point that often gets overlooked. Despite the extreme dangers that nuclear energy gone bad can pose, it’s also a zero-emission clean energy source. Don’t argue that point – that’s from the Department of Energy.
Also, going nuclear has the advantage of extremely high energy density. We all know about the density attribute that keeps the hydrocarbon sector relevant. Well, now look at nuclear energy. One uranium fuel pellet creates as much energy as one ton of coal, 149 gallons of oil or 17,000 cubic feet of natural gas. So, with uranium demand soaring, NexGen’s mining operation has soared.
Financially, I must say that it doesn’t deliver the most confidence. However, analysts are overlooking the near-term picture and focusing on the long run. They rate NXE a unanimous strong buy with a $10.76 average price target. Notably, the high-side target hits $15.59.
Headquartered in Littleton, Colorado, Ur-Energy (NYSEAMERICAN:URG) calls itself North America’s premier uranium mining company. Such a business framework will be increasingly critical moving forward. True, Kazakhstan isn’t exactly an adversary of ours. Indeed, geopolitical dynamics have made the country turn its eyes to the West. Still, it’s also not a bastion of stability and democracy. Therefore, having energy tied to these questionable regions presents national security risks.
Therefore, based on pure geopolitical realities, Ur-Energy may get a look as one of the top uranium stocks 2024. Still, prospective investors need to recognize the risks. With its low share price and low market capitalization, it could fly higher on any positive news – but it could also collapse on less-than-encouraging data. And sure enough, the financial proposition isn’t particularly enticing. It does, however, carry decent strengths in the balance sheet.
However, the two analysts that cover URG are overlooking the immediate challenges and focusing instead on the upside opportunity. Basically, the Kazakhstan situation is forcing a rethink in the uranium sector. So, the experts rate shares a moderate buy with a $2.60 average price target.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.