Uranium is set to boom, and this is the 'premium' ASX stock to buy

Shaw and Partners' Jed Richards reckons these are the shares to buy for the nuclear energy theme.

| More on:
A Paladin Energy miner wearing a hard hat and protective gear stands in front of a large mining truck and smiles to the camera.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

It was not even on the agenda three years ago, but now there is much talk about nuclear power.

Russia's invasion of Ukraine in 2022, the ongoing conflict in the Middle East, plus the imperative to reduce carbon emissions are all combining to force nations to reconsider their energy security.

Even in Australia, where by law nuclear power plants are banned, one side of politics is pushing hard for the solution.

Former chief scientist Alan Finkel last week explained some of the advantages of nuclear power.

"The volume of fuel is small, with only one tonne of uranium needed to produce the same amount of electricity as 100,000 tonnes of black coal," Finkel said in the The Sydney Morning Herald.

"The land footprint is only about three square kilometres for a one-gigawatt nuclear plant versus about 60 square kilometres for a three-gigawatt solar plant that would generate the same annual output."

Shaw and Partners senior investment advisor Jed Richards is bullish on the ASX uranium sector for this precise reason.

"Australia is closer to accepting nuclear power than ever before. China's demand for uranium is enough to drive profitability," Richards told The Bull.

And there is one uranium stock that he would buy right now.

The uranium shares that are 'our preferred exposure'

Richards calls Paladin Energy Ltd (ASX: PDN) the "premium and most liquid stock in the uranium sector". 

"It remains our preferred exposure to an improving uranium market." 

The stock has risen a spectacular 149% over the past 12 months, which is an even steeper climb than the global uranium price.

"The shares have performed strongly in the past year, and we expect this favourable momentum to continue."

The analysts at Blackwattle are also bullish on Paladin, as they said in a memo to clients earlier this year.

"The market for uranium remains in a significant deficit and is expected to remain that way for the rest of the decade.

"This places restart projects like Paladin in a great position to capitalise on the high prices that are needed to incentivise additional supply to enter the market."

The support is unanimous in the professional community.

Broking platform CMC Invest currently shows all eight analysts covering Paladin stock rating it as a strong buy.

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Energy Shares

A female coal miner wearing a white hardhat and orange high-vis vest holds a lump of coal and smiles as the Whitehaven Coal share price rises today
Dividend Investing

Invest $10,000 in New Hope shares and get $1,006 in passive income

Many ASX investors buy New Hope shares for their high yielding, fully franked dividends.

Read more »

a man in a business suit looks at a map of the world above a line up of oil barrels with a red arrow heading upwards above them, indicting rising oil prices.
Energy Shares

Why a US$100 oil price is on the horizon: IMF

A higher oil price could be on the horizon following this IMF prediction and Israel’s reported strike on Iran.

Read more »

A miner in visibility gear and hard hat looks seriously at an iPad device in a field where oil mining equipment is visible in the background.
Energy Shares

Why is this ASX 200 energy stock crashing 8% today?

Why are investors hitting the sell button on Friday?

Read more »

sad looking petroleum worker standing next to oil drill
Energy Shares

Woodside share price tumbles on 12% quarterly revenue decline

ASX 200 investors are bidding down the Woodside share price today.

Read more »

Worker inspecting oil and gas pipeline.

Here's where I see the Woodside share price ending 2024

I think the Woodside share price is poised for a 2024 rebound.

Read more »

A male oil and gas mechanic wearing a white hardhat walks along a steel platform above a series of gas pipes in a gas plant
Energy Shares

Here's how the Santos share price is responding to today's production results

Santos reported its quarterly production and revenue results today.

Read more »

A man casually dressed looks to the side in a pensive, thoughtful manner with one hand under his chin, holding a mobile phone in his hand while thinking about something.
Energy Shares

Should you buy the 10% dip on this ASX 300 uranium stock?

Could big returns be on the cards for buyers of this stock? Let's see what analysts are saying.

Read more »

A female coal miner wearing a white hardhat and orange high-vis vest holds a lump of coal and smiles as the Whitehaven Coal share price rises today
Broker Notes

1 ASX 200 energy stock with 'minimal competition' to buy right now

This stock is trading 30% lower than its 2022 record high.

Read more »