The Nuclear Power Comeback Is Real -- and These 3 Stocks Are the Best Way to Play It

Electricity demand has ticked higher thanks to new technologies such as artificial intelligence and the widespread adoption of electric vehicles. Add in a shift toward cleaner energy sources, and nuclear power is experiencing a renaissance. Giant technology companies like Meta (NASDAQ: META), Microsoft (NASDAQ: MSFT), and Google are spending heavily to ensure they have access to nuclear power.

You can invest in Nuclear power, too, with stocks like NuScale Power (NYSE: SMR), Cameco (NYSE: CCJ), and, for those that are a little less adventurous, Brookfield Renewable (NYSE: BEP)(NYSE: BEPC). Here's a look at each one.

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NuScale Power is a bet on the future

Shares of NuScale Power have fallen 75% below their 52-week high. In some ways, the stock looks cheap. But given that the company is a start-up, it is also quite risky. NuScale Power has an approved design for a small modular nuclear reactor (SMR), but it hasn't yet finalized its first reactor sale. So, at this point, it is still losing money and will likely continue to do so for a while longer.

That said, SMRs represent a significant opportunity in the nuclear power sector. They are factory-built, which offers the benefits of assembly line construction. They are small and can be transported easily to where they are needed. They include modern safety features, which hints that they will be safer than large, site-built reactors. And they can be linked together to create utility-scale power plants. If SMRs gain traction, NuScale Power could be a long-term growth opportunity.

That said, you need to believe that SMRs will gain traction. And that NuScale Power will be one of the winners, given that it isn't the only company attempting to capitalize on the SMR opportunity. Only more aggressive investors should consider NuScale Power.

Cameco is a picks and shovels play

Historically, Cameco has mined and processed uranium, providing nuclear power plants with the fuel they need to operate. It recently bought a 50% stake in Westinghouse, one of the world's largest service providers in the nuclear power space. It is a pure-play, picks-and-shovels investment in the nuclear power sector. That said, the big driver of the company's performance is going to be uranium prices, which are currently high. The stock is not cheap.

Cameco doesn't appear to be worried, however, because it expects uranium demand to outstrip supply around 2030. If that comes to pass, uranium prices could continue to rise and Cameco's stock could, too. Once again, this is a stock most appropriate for aggressive investors, given its 175% price gain over the past year. If high uranium prices lead to an increase in uranium supply, Cameco's future could be less bright than Wall Street currently expects.

Brookfield Renewable is a way to hedge your bets

If you want some exposure to nuclear power, but aren't ready to jump in with both feet, you should consider Brookfield Renewable. This company owns the other half of Westinghouse. In addition, it owns a globally diversified portfolio of clean energy assets, including hydroelectric, solar, and wind power, as well as energy storage. With one investment, you get exposure to the entire clean energy sector, including nuclear power.

One of the big draws of nuclear power is that it doesn't produce greenhouse gases. Brookfield Renewable plays on that theme, with a nuclear power twist. That's a hedge for investors that aren't ready to go all-in on nuclear power just yet. Meanwhile, Brookfield Renewable pays an attractive dividend. The partnership units yield 4.5%, and the corporate shares yield 3.8%. They represent the same entity and pay the same dividend; there's just more demand for the corporate shares. Most small investors would be just fine with the higher-yielding partnership units.

Three different ways to play the nuclear renaissance

There is no right way to invest in nuclear power; there's just the way that best fits your investment approach. NuScale Power is a start-up that aggressive growth investors might appreciate even though Wall Street is downbeat on the shares. Cameco is a picks-and-shovels play, supplying the industry with what appears to be an increasingly scarce resource. And Brookfield Renewable is a high-yield option that lets you dip your toes into the nuclear waters.

Reuben Gregg Brewer has positions in Brookfield Renewable Partners. The Motley Fool has positions in and recommends Cameco, Meta Platforms, and Microsoft. The Motley Fool recommends Brookfield Renewable, Brookfield Renewable Partners, and NuScale Power. The Motley Fool has a disclosure policy.