With The Southern Company (SO), Nuclear Still Has a Chance

Uranium Energy Corp. (NYSEMKT:UEC) is a smaller uranium producer using a low cost in-situ method to extract uranium in Texas. The company is still in startup mode with operating income losses. Regardless, its facilities are finally starting to produce revenue, and it is expect to post an EPS of $0.22 in 2014.

This company’s in-situ method is estimated to be profitable at $40 to $50 per pound, while conventional mines need a minimum of $80 per pound. With current spot prices around $40 per pound and long term prices around $60 per pound, Uranium Energy is in a great position to grow. The company has no debt and a sufficient cash reserves with a quick ratio of 3.1 and a current ratio of 3.6. While the company is still rather risky due to its small size and lack of profits, it is a great company to watch as low uranium prices discourage the development of conventional uranium mines.

Conclusion

The Southern Company (NYSE:SO) is a strong company for risk adverse investors. The utility offers dependable income with its high yield and strong dividend growth. The company is innovating America’s nuclear industry with new prefabrication techniques. Although the company’s new nuclear plants construction schedule has slipped, South Company is a relatively diversified way to invest in uranium.

Cameco is a strong uranium miner with the mines and experience to wait out the current challenges. The company has established contacts in China and is already powering the Chinese economy. Uranium Energy is a good company to watch as it grows its operations and comes closer to profitability. While its small size makes it risky for the time being, its low cost production techniques will help it to be profitable in the long term.

Joshua Bondy has no position in any stocks mentioned. The Motley Fool recommends Southern Company.

The article With Southern Company, Nuclear Still Has a Chance originally appeared on Fool.com.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.