If you just looked at the headlines, you’d think this is the absolute worst time to invest in anything related to nuclear power.
After all, Big Media has been giving us a steady diet of stories about the benefit to the planet found in green energy.
The issue confronting us is that right now we don’t have nearly enough large, industrial-grade storage systems for wind or solar power.
Which brings me back around to a company that is set to double its stock, not by avoiding nuclear power, but by gladly embracing it.
That’s a good thing because right now as we speak roughly 55 nuclear power plants are being built around the world. And just the equipment part of the sector is worth $67.2 billion.
Today, I will reveal a market-beating play on these new reactors and the 440 already in use in 30 countries…
Classic High-Tech Energy
Now then, I have followed the nuclear power industry for decades. I did a groundbreaking series of stories about the field in the mid-1980s and have kept abreast of those trends.
That’s because at heart I believe nuclear has a place in nearly every nation’s need to generate reliable, cost-effective electricity.
Some of you may be thinking that nuclear is dangerous. I don’t agree and haven’t for nearly 40 years. But I do understand some folks get worried based on the headlines.
No doubt, when nuclear plants have problems, they get a lot of media attention. We’re talking Three Mile Island in the U.S., Chernobyl in Russia, and Fukushima in Japan.
But quietly and behind the scenes, the nuclear power industry has improved both its safety record and its efficiency.
No wonder it remains in growth mode.
Consider that the World Nuclear Association (WNA) says global electricity demand is increasing about twice as fast as energy use. And that trend is expected to remain true through at least 2040.
Add to that the fact that a recent MIT study noted that the system cost of electricity in the US would be two times without nuclear. In China, the cost would rise four-fold.
Now you know why this energy source is still very much in the game. According to the WNA, China, the US, and other advanced economies rely on nukes for 18% of their power needs.
For those worried about man-made global warming, there’s another benefit here as well. These plants are as carbon neutral as any other “green energy” source.
The Atomic Age
Turns out there’s one company that industry and the US government turn to for their nuclear needs and insights. And it started in 1856 in Lynchburg, Virginia, building steam engines.
By WWII, it was supplying the US government with materials and process development for the Manhattan Project.
In the early 1950s, it designed and built components for the USS Nautilus, America’s first nuclear submarine. By the 1960s, it was building utility-scale reactors.
BWX Technologies Inc. (BWXT) has been on the cutting edge of nuclear research and development for decades. It works with the world’s biggest players and has rock-solid relationships with NASA, the Department of Defense, and the Department of Energy.
It’s well poised to benefit from the fact that the industry is going through a massive upgrade cycle.
New technologies have allowed scientists to rethink how to maximize the benefits of nuclear and minimize the downsides.
Even now, we see this playing out. France gets 70% of its electricity from nuclear. China has 45 nuclear power plants with 12 under construction.
Here’s the thing. Unlike reactors of the past that were each custom built to a specific site, modern reactors are standardized.
Don’t scoff. This makes construction and operations much more reliable – and far safer. If a problem occurs at one plant, it can be fixed across the entire system.
Nuclear facilities also can be much more strategic because they don’t have to be gigantic in footprint or output. There are new reactors being built now that are “modular.”
This last aspect is key for the modern nuclear industry. These plants can be built on a small scale to power a small city or town, reducing risk and waste.
And as a city grows, it can add new reactors to the original ones. That reduces upfront costs and means the plant can be scaled up as needed.
Plus, nuclear is a great source for space exploration. The U.S. and other nations plan on launching regular manned missions to the moon and Mars, using nuclear reactors to power launch, propulsion, and control systems.
BWX has them covered. Right now, it’s partnering with NASA to develop and implement a nuclear thermal propulsion (NTP) system by the end of the decade.
The goal is to build an NTP system that will dramatically reduce travel time between Earth and Mars while increasing payload size. Calculations at this point are reducing 6 months needed for chemically fueled trips down to 4 months.
It may not sound like much but it adds up to an extra round trip per year.
Despite its long history, BWX only went public in 2015. Over the past four years, is has grown per-share profits by more than 100%.
If it just maintains that pace, the company could double earnings once again before the end of 2024.
And since stock prices tend to follow earnings growth, that means this is a good way to keep powering your portfolio higher for years to come.
Cheers and good investing,
Michael A. Robinson