Why This High-Growth Energy Tech Stock Could Someday Pay a Monster Dividend

Cameco (NYSE: CCJ), the world's second-largest uranium miner, is attracting important attraction arsenic the atomic vigor marketplace expands again. Over the past 5 years, its banal surged astir 750% arsenic the S&P 500 roseate little than 80%. The rally was driven by surging uranium prices, which yet recovered from a decade-long slump pursuing the Fukushima catastrophe of 2011.

Cameco's market-crushing gains were impressive, but astir investors astir apt didn't wage excessively overmuch attraction to its paltry guardant dividend output of 0.15%. However, I judge the institution tin easy rise that payout and go a high-yield vigor stock.

Where to put $1,000 close now? Our expert squad conscionable revealed what they judge are the 10 champion stocks to bargain close now, erstwhile you articulation Stock Advisor. See the stocks »

Cameco operates uranium mines and mills crossed Canada, the U.S., and Kazakhstan. From 2011 to 2021, its yearly gross plunged from $2.4 cardinal to $1.2 billion.

In effect to the Fukushima disaster, galore countries paused their atomic vigor projects. As a result, uranium's spot terms plummeted from a highest of $136 per lb successful June 2007 to conscionable $18 per lb successful November 2016. Cameco and its manufacture peers temporarily shuttered their largest mines to chopped costs arsenic that request dried up, and their revenues shriveled.

But arsenic of this writing, uranium's spot terms has risen backmost to $94 per pound. That betterment was driven by the accelerated enlargement of the power-hungry unreality and AI markets, which prompted countries to restart their atomic projects; the improvement of safer, much power-efficient reactors; geopolitical conflicts successful uranium-rich regions; and erstwhile excavation closures, which further tightened uranium supply. Cameco reopened its biggest mines arsenic uranium's spot prices rose, but the request continues to outstrip its supply.

Cameco besides partnered with Brookfield Asset Management (NYSE: BAM) to get Westinghouse Electric, a atomic powerfulness works decorator and builder, successful 2023. Its 49% involvement successful the institution is reducing its dependence connected volatile uranium prices.

From 2021 to 2024, Cameco's gross grew astatine a CAGR of 29%. From 2024 to 2027, analysts expect its gross and EPS to summation astatine CAGRs of 9% and 91%, respectively.

Cameco's dividend is tiny, but its trailing payout ratio of 13% gives it plentifulness of country for aboriginal hikes. That mightiness look similar a risky telephone for a cyclical stock, but Citi analysts expect uranium's spot terms to proceed rising to astatine slightest $100 per lb this year.