Investing in uranium stocks

It’s a low-carbon alternative to fossil fuel but can be highly dangerous.

This commodity is best known for its use in nuclear energy production but has a destructive history. Investors should explore how this material is mined and used before they invest.

What is uranium?

Uranium is a radioactive heavy metal used to fuel nuclear reactors and craft nuclear weapons. It’s mined in a number of countries, but a majority of the world’s uranium supply comes from Kazakhstan, Canada and Australia. Kazakhstan commands the market and was responsible for a whopping 43% of the world’s uranium supply in 2019.

Uranium shares are stocks from companies involved in the mining, refining and distribution of global uranium.

Why invest in uranium stocks?

As oil production and consumption continue to trend downward, the world has begun to look to alternative energy sources — and nuclear energy is a big contender.

The World Nuclear Association reports that 30 countries worldwide are working to build nuclear power programs, including China, India, Israel, Norway, Saudi Arabia and Uganda, to name a few.

Uranium fuels nuclear energy. And nuclear energy presents a low-carbon alternative to fossil fuel. The International Energy Agency states that the world must double its nuclear power capacity by 2050 to meet climate change emission-cutting targets.

Uranium is poised to play a big role in the future of global energy production. Investors who buy now could have a viable buy-and-hold investment on their hands as nuclear energy ramps up around the world.

Risks of investing in uranium

Some global attitudes towards uranium have begun to pivot, but not everyone is ready to put uranium’s destructive past behind them.

The devastation of uranium-packed nuclear bombs on Hiroshima and Nagasaki coupled with the terrifying fallout of Chernobyl stand as proof of uranium’s dangers. And after the Fukushima power plant meltdown in 2011, Japan shuttered the doors on most of its nationwide nuclear plants. A country that planned to increase its nuclear power generation to 40% by 2017 now draws less than 2% of its energy from nuclear power.

And Japan isn’t alone. Germany dropped its nuclear energy consumption from 25% in 2011 to 12% in 2019. Other countries have discontinued or banned nuclear energy entirely, like Australia, Italy and Lithuania.

The future of uranium is uncertain. As demand for this type of energy increases in some countries, others are actively reducing or eliminating their consumption.

Uranium is a divisive material and investment. Investors interested in this commodity should familiarise themselves with the potential dangers before buying in.

Invest in uranium stocks from the UK

Uranium is a global resource mined and produced by numerous international companies. For well-rounded uranium portfolio exposure, prepare to invest in both UK and international stocks.

Select a company to learn more about what it does and how its stock performs, including market capitalisation, the price-to-earnings (P/E) ratio, price/earnings-to-growth (PEG) ratio and dividend yield. While this list includes a selection of the most well-known and popular stocks, it doesn't include every stock available.

International uranium stocks

  • Areva SA (ARVCY)
  • Aura Energy (AUEEF)
  • Berkeley Energia (BKLRF)
  • Fission Uranium (FCUUF)
  • Paladin Energy (PALAF)

What ETFs track the uranium category?

Only a few ETFs are dedicated to tracking uranium stocks.

  • Global X Uranium ETF (URA)
  • Horizons Global Uranium Index (HURA)
  • North Shore Global Uranium Mining ETF (URNM)

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