Could Buying Oklo Stock Today Set You Up for Life in Dividend Income?

Oklo (NYSE: OKLO) is a nuclear fission and nuclear recycling specialist that is trying to revolutionize the energy space. The company went public in May 2024 through a merger with a special purpose acquisition company (SPAC).

Oklo's business is still in a pre-revenue state, and the outlook for the company's energy technologies remains highly speculative. While rising energy demands connected to artificial intelligence (AI) data center trends have helped promote big valuation gains for the company, its path to getting its nuclear fission tech to a viable commercial state is still highly uncertain.

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Could Oklo become a high-yield dividend stock?

If Oklo shifts into posting reliable profits and free cash flow from which it can pay dividends, shareholders who buy the stock at today's prices will likely see massive capital appreciation in addition to enjoying dividend yields that could look huge in relation to the company's current share price. On the other hand, investors should understand that there is still a long way to go before the company can reach a position where it makes sense to consistently pay a meaningful dividend.

Many companies in the energy sector pay reliable dividends with sizable yields and reliable payout growth. For example, ExxonMobil has increased its dividend on an annual basis for 43 years running -- and its stock currently sports a yield of roughly 2.7%. Meanwhile, Brookfield Renewable sports a 4.6% yield. While these two companies have vastly different business models, they are both well established players in their respective corners of the energy market and reliably generate strong cash flows from which to pay dividends.

As of this writing, Oklo stock is up roughly 97% over the last year. The company does not currently pay a dividend, but breakthroughs for its nuclear fission tech could pave the way for it to begin returning cash directly to shareholders through regular dividend payments.

In last year's third quarter, Oklo posted an operating loss of $36.3 million on zero revenue. On the other hand, the loss actually looks relatively small when viewed in the context of the highly capital intensive nature of being an upstart player in the energy space. Oklo ended the third quarter with cash and short-term equivalents totaling approximately $1.2 billion, but the business is still in a developmental phase.

If Oklo reaches a point where it can reliably pay dividends, investors who buy the stock at today's prices and hold on a long-term timeline could wind up banking stellar yields. On the other hand, betting that the company will make it to that point remains highly speculative.

Keith Noonan has no position in any of the stocks mentioned. The Motley Fool recommends Brookfield Renewable. The Motley Fool has a disclosure policy.