9 Stocks That Will Benefit from Nuclear's Return to Power - Barron's

Annotated article summary from this weekend's Barron's. Receive all our Barron's summaries by signing up here:

Nuclear Energy's New Power Trip by Dimitra Defotis

Summary: Electricity stocks have made one-year gains triple those of the broad S&P index. But Barron's says nuclear players in power-constrained markets should see sustained growth for another 3-5 years. Factors favoring nuclear energy include global warming from coal emissions, rising global power needs, diminishing U.S. natural gas supplies and cost-efficiency (nuclear reactors cost more to construct but produce cheaper electricity). TXU Corp. (TXU), recently bought by private equity firm KKR, is scrapping coal and going atomic. Utilities, suppliers and nuclear servicers should benefit from the pro-nuke movement: Analysts peg utility stocks like Exelon (EXC), Entergy (ETR), Dominion Resources (D) and Constellation Energy (CEG) for 20% gains over the next 12 months. NRG Energy's (NRG) P/E (near 20) is high, but its assets are undervalued; bulls see 25% upside. Scarce uranium supplies have boosted miners, but Canada's Cameco (CCJ) is presently cheap due to delays at its new Cigar Lake mine. GE's (GE) nuclear services business should profit: NRG ordered new reactors from GE, and GE hopes India will too. Veteran nuclear engineers and clean-up experts Fluor (FLR) and Chicago Bridge & Iron (CBI) shares are high, but strong energy prices should push earnings higher.

Related Links: Constellation Energy Lights Up Investors - Barron's • U.S. Utilities Quietly Worry about Uranium Supply • U.S. Utilities ‘Stealth’ Nuclear Revival • Profiting from the Advanced Energy Initiative: Clean Coal, Nuclear Power & Uranium Miners • Why I'm Bullish On Coal Stocks • GE Goes Nuclear

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