10 Cheap Nuclear Energy Stocks to Buy Amid Energy War

In this article, we will look at the 10 cheap nuclear energy stocks to buy amid the energy war in Europe. If you want to explore similar stocks, you can also take a look at 5 Cheap Nuclear Energy Stocks to Buy Amid Energy War.

Russia has been accused of weaponizing gas by G7 countries. On August 31, Russia completely cut off gas supplies to Europe via the Nord Stream 1 pipeline, for the second time this year, because of the sanctions imposed by the West due to the Ukraine war and maintenance issues. Back in July, when Russia cut off gas to Europe for 10 days due to a turbine problem at the Nord Stream 1, a majority of the member states of the European Union came to a decision of reducing the region’s natural gas consumption by 15% to reduce its reliance on Russia for gas.

Energy Crisis Sending Eurozone Inflation to 9.1%

The energy crisis in Europe is worsening. Inflation is reaching new highs and registered a reading of 9.1% in the Eurozone region in August, up from 8.9% in July. Energy prices were the primary driving force for cost increases. The energy index merely declined to 38.3% in August from 39.6% in July. Food prices continued to rise to 10.6% in August, up from 9.8% in July. The index for non-energy industrial goods accelerated to 5.0 % in August, up from 4.5% in July, and the index for services registered a reading of 3.8 % in the month, up from 3.7 % in July.

Nuclear Renaissance

In wake of Russia’s unreliability to supply Europe with gas, European policymakers are revisiting the prospects of relying on nuclear power to meet their growing energy needs. On July 6, EU lawmakers ruled in favor of adopting nuclear energy as a clean and green energy source. In February 2022, France announced its plans to build up to 14 new nuclear reactors by 2050 in an effort to reduce its dependence on fossil fuels. After the Fukushima nuclear disaster in 2011, Switzerland announced that it will be closing its five nuclear reactors by 2034. However, in the aftermath of the Russian-Ukraine war and as concerns around climate change grow, a group of Swiss politicians launched the “Stop Blackouts” movement on August 28, to seek policy changes in the government’s energy plans to phase out nuclear energy. On September 1, Britain’s soon retiring prime minister Boris Johnson announced a GBP 700 million investment in nuclear energy infrastructure to reduce Britain’s reliance on imported fossil fuels.

The Nuclear Energy Market Analysis

According to a report by Allied Market Research, the global nuclear power plant and equipment market was worth $41.1 billion in 2020. The market is expected to grow at a compound annual growth rate of 3.5% and reach $58.4 billion by 2030. According to Mordor Intelligence, the global nuclear power market is expected to grow at a CAGR of 1.5% between 2022 and 2027 and reach an installed capacity of 426.27 gigawatts by 2027, from 388.7 gigawatts in 2020. Another report by Report Linker forecasts the global nuclear electricity market to grow to $179.89 billion in 2022, from $166.13 billion in 2021, at a CAGR of 8.3%. Extrapolating to 2026, the global nuclear electricity market is expected to hit a valuation of $239.17 billion in 2026, registering a CAGR of 7.4%.

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Some of the most prominent players in the nuclear electricity market include NextEra Energy, Inc. (NYSE:NEE), Cameco Corporation (NYSE:CCJ), and Uranium Energy Corp. (NYSE:UEC).

Our Methodology

Cheap Nuclear Energy Stocks to Buy Amid Energy War

PE Ratio as of September 2: 15.28 

Iberdrola, S.A. (OTC:IBDRY) generates, distributes, and supplies electricity in Spain and internationally. The company generates electricity through using renewable sources such as wind, hydropower, solar PV, nuclear, and biomass among others. Shares of Iberdola, S.A. (OTC:IBDRY) have surged by 4.90% over the past six months as of September 2.

Iberdola, S.A. (OTC:IBDRY) has an installed nuclear capacity of 3,344 megawatts. The company wholly owns the Cofrentes Nuclear Power Plant, owns 52% of the Almaraz Nuclear Power Plant, 50% of the Santa María de Garoña Nuclear Power Plant, and 49% of the Trillo Nuclear Power Plant, among other minority ownership interests in various nuclear sites in Europe.

Iberdola, S.A. (OTC:IBDRY) currently has an installed capacity of 39,000 megawatts all across the globe and aims to extend its capacity to 90 gigawatts by 2030. The stock is currently trading at a discount, making it an attractive entry point for investors to rack up shares of the Spanish energy giant. As of September 2, Iberdola, S.A. (OTC:IBDRY) has a PE ratio of 15.28 and is offering a forward dividend yield of 4.40%, which the company supports with free cash flows of $2.13 billion.

Like NextEra Energy, Inc. (NYSE:NEE), Cameco Corporation (NYSE:CCJ), and Uranium Energy Corp. (NYSE:UEC), Iberdola, S.A. (OTC:IBDRY) can benefit from the nuclear renaissance as the world dumps fossil fuels to become greener.

8. Enel SpA (OTC:ENLAY)

PE Ratio as of September 2: 13.88

Enel SpA (OTC:ENLAY) generates, transmits, distributes, transports, and sells electricity and natural gas. The company operates renewable, nuclear, wind, thermal, hydroelectric, photovoltaic, and geothermal power plants. Enel SpA (OTC:ENLAY) was founded in 1962 and is headquartered in Rome, Italy. As of September 2, Enel SpA (OTC:ENLAY) has a trailing twelve-month PE ratio of 13.88 and is offering a forward dividend yield of 8.92%.

Though Enel SpA (OTC:ENLAY) has nuclear projects in Russia, but none of them are operational currently. The company has a 92% share in one of Endesa’s (OTC:ELEZY) nuclear sites and also a 66% ownership interest in the Slovenské elektrárne’s nuclear site in Slovakia. The company also has a strategic partnership with Electricité de France S.A. (OTC:ECIFF).

On July 28, Enel SpA (OTC:ENLAY) announced earnings for the second quarter of fiscal 2022. The company reported earnings per share of EUR 0.16 and generated a revenue of EUR 67.25 billion, up 85.3% year over year.

On August 1, Citi analyst Antonella Bianchessi upgraded Enel SpA (OTC:ENLAY) to Neutral from Sell and reiterated her price target of EUR 4.80 price target.

PE Ratio as of September 2: 11.69

Endesa, S.A. (OTC:ELEZY) generates, distributes, and supplies electricity in Spain and Portugal. The company generates electric power from hydroelectric, nuclear, thermal, wind, and solar energy sources. Endesa, S.A. (OTC:ELEZY) has ownership interests in various nuclear power plants. The company wholly owns Unit 1 of the Ascó Nuclear Power Plant, 85% of Unit 2 of the Ascó Nuclear Power Plant, 72% of the Vandellòs Nuclear Power Plant, 50% of the Santa María de Garoña Nuclear Power Plant, and 36% of the Almaraz Nuclear Power Plant.

This August, Morgan Stanley analyst Lillian Starke revised her price target on Endesa, S.A. (OTC:ELEZY) to EUR 20 from EUR 22.20 and reiterated an Equal Weight rating on the shares. On August 3, Credit Suisse analyst Stefano Bezzato revised his price target on Endesa, S.A. (OTC:ELEZY) to EUR 20.50 from EUR 22.60 and maintained a Neutral rating on the shares.

As of September 2, Endesa, S.A. (OTC:ELEZY) is trading at a price-to-earnings ratio of 11.69 and is offering a forward dividend yield of 8.84%.