The market’s got a fever, and it thinks nuclear’s the cure. Everybody’s chasing the glow these days, especially since Microsoft decided Three Mile Island wasn’t a bad place to cool some servers. Suddenly, every uranium play looked like a winner. Problem is, a winner in the books doesn’t always translate to a bargain on the street. Most of these stocks are priced like they’ve already solved the energy crisis.
But there’s always one corner of the room where the shadows cling a little tighter. Right now, that’s probably Cameco.
What They Do
Cameco. Saskatoon, Canada. They call themselves a provider of fuel for a ‘secure energy future.’ Sounds like a campaign slogan. What it means is they dig uranium out of the ground. And they’ve got a lot of it. The biggest pile, they claim. Digging it up doesn’t cost them an arm and a leg – less than $46 a pound, last I checked. Uranium itself is trading north of $85. Simple arithmetic, if you can stomach it.
They also own a chunk of Westinghouse Electric, and a piece of a company that enriches uranium. Diversification. Smart. Keeps the vultures from circling too close.
Westinghouse is the big money maker, pulling in $1.8 billion so far this year. Cameco proper – the digging and selling – brings in about $1.3 billion. Refining and enriching adds another $279 million. Total revenue around $2.2 billion a year. The profit margin was thin last year – 8%. This year? A jump to 23%. A sudden bloom in a rather barren landscape.
The Competition
Twenty-three percent. It’s a solid number. Unlike some of these uranium startups, fueled by hype and wishful thinking, Cameco actually makes a profit. A small one, maybe, but a profit nonetheless.
Valued at over $50 billion, they earned less than $378 million in the last twelve months. That’s a price-to-earnings ratio of 134. Not exactly a steal. But look at the others. Uranium Energy, Energy Fuels, Denison Mines… they’re bleeding money. Empty pockets and full promises.
Free cash flow is even more interesting. Nearly double their net income, at $698 million. That brings the price-to-free-cash-flow ratio down to 72. Still high, but manageable. Analysts are betting on 75% annual growth over the next five years. If they deliver, Cameco’s price-to-FCF-to-growth ratio dips below one. A rare sight in this market.
The Status Report
Cameco reported earnings in November. The next report is just around the corner. The last one was… encouraging. Tim Gitzel, the CEO, said their uranium, fuel services, and Westinghouse divisions were all ‘strong.’ Nuclear power, he said, is ‘on a path toward robust expansion.’ Sounds like a press release. But the numbers back it up.
Westinghouse is the engine, fueled by a planned $80 billion investment in new nuclear plants in the US. They’re building those plants around the Westinghouse AP1000 design. Solid engineering. Reliable. Like a well-worn revolver.
If they can keep the profit margins up in their uranium business – and given the difference between production cost and retail price, they should – Cameco looks like a good bet. A long one, maybe. But a bet worth considering.
Of course, a lot depends on them hitting that 75% growth target. It’s a steep climb. But if they do, even 72 times free cash flow might not be too high a price to pay for a piece of the nuclear future. This isn’t a game for the faint of heart. It’s a long play in a world running out of easy answers.
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2026-01-25 13:12