BWX Technologies Already Builds Reactors for the Navy. Why Is It Still the Cheapest Nuclear Stock?

There are nuclear stocks trading at lower valuations than BWX Technologies (NYSE: BWXT), including Constellation (NASDAQ: CEG) and Duke Energy (NYSE: DUK), large utility companies that use nuclear power, but compared with its peers, BWX stock is still a steal. The stock is down more than 7% so far this year.

Hot nuclear stocks GE Vernova (NYSE: GEV), NuScale Power (NYSE: SMR), Oklo (NYSE: OKLO), Cameco (NYSE: CCJ), and Uranium Energy (NYSEMKT: UEC) all trade at higher valuations than BWX whether you look at trailing price-to-earnings (P/E), forward P/E, or price-to-sales (P/S) ratio.

BWX may not be the flavor of the month, but that presents an opportunity for investors. The stock benefits from a near-sole-source monopoly supplying nuclear reactors and high-assay enriched fuel for the U.S. Navy's submarine and aircraft carrier fleet. Here are three reasons to buy this stock now.

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Strong financial health and a big backlog

In the second quarter, the defense company reported $901.6 million in revenue, up 18% year over year, driven by expansion in government and commercial nuclear services. It also reported $1.07 in earnings per share (EPS), a 5% increase from the same quarter a year ago.

The company recently signed more than $1.4 billion in contracts with the U.S. Navy to support its Nuclear Propulsion Program, including a five-year, $1.3 billion long-lead material procurement deal and $165 million to procure long-lead time nuclear system components and manufacturing to support the Navy's Ford-class aircraft carrier program.

BWX carries a backlog of more than $8.6 billion, giving it multiyear revenue visibility that insulates it from broader economic downturns.

The company was confident enough to raise its yearly revenue guidance to $3.8 billion, up 61.7%, and non-GAAP EPS of $4.70 to $4.80, up 18% at the midpoint.

A nice naval military-driven moat

BWX is the lone manufacturer of nuclear reactors and fuel for the U.S. Navy's submarine, Virginia-class and Columbia-class, and aircraft carrier fleets.

There are high levels of regulatory requirements, security clearances, and technology that any competitor would have to address to process high-assay, low-enriched uranium (HALEU) and build military-grade naval nuclear reactors. That gives BWX significant pricing power.

In addition, the war in Iran has highlighted the need for Navy modernization and fleet expansion. That's become a high-priority defense agenda, ensuring long-term government demand for BWX's services.

The company is expanding its commercial sales

Thanks to its position as a component and fuel manufacturer for next-generation small modular reactors (SMRs) and its manufacture of radioisotopes for diagnostic imaging and targeted cancer therapies, BWX is diversifying its revenue stream into high-margin markets.

In Q2, it reported commercial revenue of $303 million, up 72%, year over year, and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $36 million, up 123% over the same period a year ago. The company is predicting 45% growth in commercial sales this year thanks in large part to two recent acquisitions. In 2025, it purchased Kinectrics , which serves the small modular reactor and traditional large-scale nuclear reactor markets. This past July, it completed its purchase of Precision Components Group, which makes complex, heavy-walled, and heat-transfer components.

James Halley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends BWX Technologies, Cameco, Constellation Energy, and GE Vernova. The Motley Fool recommends Duke Energy and NuScale Power. The Motley Fool has a disclosure policy.