Across the world today, governments and businesses are embracing nuclear power in an effort to secure clean, reliable energy. As a result, nuclear energy stocks are coming into focus.
Interested in adding some nuclear energy stocks to your Stocks and Shares ISA or SIPP? Here are five names to check out.
Constellation Energy
Constellation Energy Corp (CEG:NASDAQ) is the largest operator of nuclear power plants in the US today. Currently, it has a portfolio of 21 nuclear reactors across 12 facilities, generating over 22,000 megawatts (MW) of clean capacity.
Its nuclear fleet produces enough energy to power the equivalent of 15 million homes. So, the company is playing a key role in America’s transition to clean energy.
One thing to like about this company from an investment perspective is that it’s well established and profitable, with a solid track record of growth. So, it’s not as speculative as some other nuclear energy stocks.
Another is that it is signing long-term nuclear deals with Big Tech firms. For example, in 2024, it agreed to supply Microsoft with 100% of the energy produced from the Three Mile Island Unit 1 in Pennsylvania for 20 years.
Additionally, it is moving into the Small Modular Reactor (SMR) space. Here, it is a minority shareholder in Rolls-Royce SMR Ltd and it is partnering with the company to support the development and deployment of its SMRs both in the UK and internationally.
It’s worth noting that Constellation Energy’s share price has come down significantly this year and as a result, its P/E ratio has fallen to about 22. At that earnings multiple, the stock looks attractive from a risk/reward perspective.
Vistra Corp
Another major player in the US nuclear energy industry is Vistra Corp (VST:NYSE). Thanks to its recent acquisition of Energy Harbor, it has the second-largest competitive nuclear fleet in the US, delivering roughly 6,400 MW of zero-carbon capacity across four major plants.
Like Constellation, this company is well established and profitable. This year, net income is forecast to hit $3.1 billion.
It also has long-term agreements with hyperscalers. Recently, it has signed 20-year contracts with Amazon Web Services and Meta to supply dedicated, clean energy for data centres and AI workloads.
This stock currently sports a P/E ratio of around 16 so it’s one of the cheaper nuclear energy stocks in the market. The average analyst price target is $217, which is about 50% above the current share price.
Rolls-Royce Holdings
Rolls-Royce Holdings (RR:LON) offers a unique proposition in the nuclear energy space. It offers access to the theme via two distinct, high-barrier pillars: defence nuclear propulsion and civil SMRs.
On the defence side, Rolls-Royce has supplied the UK Royal Navy’s submarine fleet for over 60 years. Here, it has long-term, inflation-indexed government contracts with high visibility and minimal default risk, anchoring the company’s broader defence cash flows.
Meanwhile, on the SMR side – where it operates via Rolls-Royce SMR Ltd – the company is quickly developing a reputation as a global leader in the technology. Note that recently, it was selected in the Great British Nuclear (GBN) competition to build Britain’s next-generation SMR fleet.
A downside to this stock is that it’s expensive – the P/E ratio is in the high 30s. However, the company has continually raised its guidance in recent years so the high earnings multiple could be justified.
BWX Technologies
Those looking for a ‘picks-and-shovels’ play on the nuclear energy theme may want to check out BWX Technologies (BWXT:NASDAQ). It manufactures components for nuclear energy systems.
BWX’s operations are divided into two main segments: government operations and commercial operations. On the government side, it is a critical supplier to the US government, and is the sole manufacturer of naval nuclear reactors and components for the US Navy.
On the commercial side, the company serves as a key manufacturing partner for SMR designs. For example, it recently signed a multi-million-pound detailed design contract with Rolls-Royce SMR to design the nuclear steam generators for its SMRs.
This is another stock that is a little bit expensive – the P/E ratio is in the 30s. It should be able to grow into this valuation in the years ahead, however.
NuScale Power
Finally, for a more speculative, high-risk/high-reward nuclear energy stock, take a look at NuScale Power (SMR:NYSE). A Small Modular Reactor specialist, it recently achieved a major milestone by becoming the first company to have an SMR design approved by the US Nuclear Regulatory Commission (NRC).
NuScale’s flagship nuclear product is the VOYGR power plant. This houses NuScale Power Modules (NPMs) – which are SMRs designed to supply energy for electricity generation, heating, desalination, and commercial-scale hydrogen production – and can be scaled to suit customer needs.
Today, this technology is well advanced. As a result, the company is now actively working on winning commercial projects across the domestic utility and technology sectors.
Now, while this company is projected to see strong revenue growth in the years ahead, it is not profitable meaning that it is a risky investment. Given the risk levels, investors should ensure that they size positions carefully with this nuclear energy stock.
Based in London, Edward is a distinguished investment writer with an extensive client portfolio comprising a diverse array of prominent financial services firms across the globe. With over 15 years of hands-on experience in private wealth management and institutional asset management, both in the UK and Australia, he possesses a profound understanding of the finance industry.
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