2 Nuclear Energy Stocks to Buy in September

Cameco (NYSE: CCJ) and BWX Technologies (NYSE: BWXT) are two top nuclear energy stocks backed by long-term industry tailwinds, and both look like solid buys in September.

Nuclear energy is becoming a key driver of energy independence and is emerging as a top choice for technology companies to power their AI data centers. Nuclear energy appeals to hyperscalers because it is clean-burning and provides reliable baseload power when compared to intermittent solar or wind energy.

Cameco and BWX Technologies have been solid performers in recent years, but both are down since the start of the year. Here's why the dip could be a buying opportunity for patient investors as we enter September.

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Cameco's high-grade mines make it a top uranium producer in North America

According to GlobalData, Cameco's Cigar Lake and McArthur River mines were the world's two highest-production uranium mines as of 2023. These high-grade mines are a massive advantage for Cameco because they enable the company to extract uranium at a lower cost than competitors. Last year, Cameco mined 19 million pounds of uranium at Cigar Lake and 15 million pounds at McArthur River/Key Lake.

In addition to mining, Cameco's 49% stake in Westinghouse Electric provides additional exposure to the nuclear energy build-out. Westinghouse provides nuclear power technology and maintenance services globally. The company designs reactors such as the AP1000, a Generation III+ reactor with passive safety features, ready for large-scale deployment.

Westinghouse is a key player in the nuclear build-out. It currently has six operating AP1000 units worldwide, with 14 under construction in China and five more under contract in Poland and Bulgaria. On June 24, the U.S. Department of Energy committed $17.5 billion in loan facilities to finance long-lead equipment needed to build 10 large-scale AP1000 reactors in the United States.

Cameco stands to benefit from Westinghouse's initial public offering (IPO), which submitted a confidential Form S-1 with the Securities and Exchange Commission (SEC) on July 31. Westinghouse's public listing will provide Cameco with a transparent valuation of Westinghouse and enable Westinghouse to raise capital to fund the nuclear build-out.

Looking ahead, Cameco has annual deliveries of over 28 million pounds of uranium secured over the next five years. Analysts project earnings per share to jump 69% in 2027 and another 26% in 2028. For investors looking to capitalize on a long-term nuclear energy build-out, Cameco is well-positioned to benefit.

BWX Technologies is the sole provider of nuclear fuel for the U.S. Navy

BWX Technologies' stock surged to $241 per share on April 16 but has since declined 33% from that 52-week high, driven by valuation compression, shifting geopolitical expectations, and broader macro pressures. Its recent decline could prove a buying opportunity for investors seeking exposure to the growth in nuclear and national defense spending.

BWXT is the only provider of nuclear reactors and the fuel needed to power them for the U.S. Navy. It has delivered 420 nuclear reactor cores to the U.S. Naval Nuclear Propulsion Program over the last seven decades.

BWXT's reactors differ from today's small modular reactors in a few ways. For one, submarines require high-power density inside a narrow hull. BWXT builds naval cores using weapon-grade, highly enriched uranium. In the wrong hands, this could create a nuclear weapon. BWXT is the only commercial company approved by the Nuclear Regulatory Commission.

On May 7, BWXT secured naval propulsion contracts totaling $1.4 billion. Meanwhile, the U.S. Navy updated its 30-year shipbuilding plan to accelerate the construction of Ford-class aircraft carriers, eliminating manufacturing gaps and enabling consistent work across BWXT's plants. On July 6, BWXT closed its acquisition of Precision Components Group. The move adds 500,000 square feet of manufacturing capacity.

BWXT has a virtual monopoly on nuclear fuel and equipment for U.S. Navy ships and should benefit from the U.S.'s continued increases in defense and national security spending. With the stock trading down 33% from its 52-week high, BWXT looks like another solid nuclear stock to scoop up at the beginning of September.

Courtney Carlsen has positions in Cameco. The Motley Fool has positions in and recommends BWX Technologies and Cameco. The Motley Fool has a disclosure policy.