Societe Generale’s global nuclear-exposed picks as capacity increases

Global nuclear energy capacity is expected to accelerate this decade, generating investment opportunities in stocks that are exposed to the sector, according to Societe Generale analysts.

The International Energy Agency’s Net Zero Emissions by 2050 plan’s most feasible, cost-effective, and socially acceptable plan to reach its goal is an increase in nuclear power capacity.

Capacity would need to double to 812 gigawatts by 2050, increasing by 27 gigawatts per year, which is the fastest pace in any previous decade.

Asia leads in new nuclear facilities under construction, with 35 of them – more than two-thirds of the total global market. Also, out of the 31 reactors being constructed since 2017, all but four are designed by Russia or China.

The following are 38 global stocks that are exposed to nuclear power development, “from uranium extraction to equipment makers and utilities,” analysts said in a note.

This basket trades at 13x earnings and has outperformed the broad market (ACWI) by 14% year-to-date.

These stocks are also listed in the U.S., Canada, Europe, and Asia, with a market cap greater than $500M and an average daily traded value of more than $5M.

• NextEra Energy (NEE) – Company’s portfolio is 20% nuclear
• Duke Energy (DUK) – 37% of the company’s power generation comes from nuclear
• Dominion Energy (D) – More than 40% of its electricity comes from nuclear
• Iberdrola (OTCPK:IBDSF) – 27% of net electricity production comes from nuclear
• Hitachi (OTCPK:HTHIY) – A joint venture with GE
• Exelon (EXC) – 53% of its power generating assets is produced at 25 nuclear plants
• Xcel Energy (XEL) – 30% of the electricity provided comes from nuclear
• Public Service Enterprise Group (PEG) – 35% of generated electricity is sourced from nuclear
• Engie SA (OTCPK:ENGIY) – 17% of first quarter 2022 EBIT comes from nuclear; gradual phase out of nuclear plant in Belgium.
• CEZ (OTCPK:CEZYY) – Nuclear makes about 37% of EBITDA; new unit in construction in Dukovany
• CGN New Energy Holdings (OTCPK:CGEGF) – Marketing and trading of CGN’s uranium resources
• Endesa SA (OTCPK:ELEZF) – 47% of the total gross output in 2021 came from nuclear
• NTPC [Not covered] – Power generation
• Constellation Energy (CEG) – Company’s generating capacity comprises 57% nuclear
• Mitsubishi Heavy Industries (OTCPK:MHVYF) – Operates nuclear energy systems
• Fortum Oyj (OTCPK:FOJCF) – 22% of total output is nuclear; Olkiluoto Nuclear Power plant has three unit starts as of September 2022
• The Kansai Electric Power (OTCPK:KAEPF) – Nuclear capacity represents more than a fifth of installed capacity
• Rolls-Royce Holdings (OTCPK:RYCEY) – Development of Small Modular reactors in the UK
• Doosan Enerbility [Not covered] – Nuclear reactor jointly developed with Saudi Arabia
• Hyundai Heavy Industries [Not covered] – Activities include shipbuilding and energy systems
• Pinnacle West Capital (PNW) – Owns 29% of the largest nuclear power plant in the U.S.
• Chubu Electric Power Company (OTCPK:CHUEF) – In the top three by total assets among Japan utilities
• Tokyo Electric Power Company Holdings (OTCPK:TKECF) – Nuclear represents around a fifth of the total capacity
• Centrica (OTCPK:CPYYF) – 26% of the aggregate supply business EBITDA in 2021
• BWX Technologies (BWXT) – supplies nuclear components and fuel
• Shanghai Electric Group (OTC:SIELF) – Number one market share in China nuclear-related products
• IHI Corp. (OTCPK:IHICF) – Defense company, builds components for nuclear plants
• Flowserve (FLS) – leading provider of pumps to the nuclear power industry
• Spie SA (OTCPK:SPIWF) – About 3% of revenue and 5% of EBIDTA is nuclear
• Uniper SE (OTCPK:UNPRF) – 25% of total output; nuclear generation in Sweden
• Bharat Heavy Electricals [Not covered] – Produces turbines and components for nuclear plants
• Korea Electric Power Corporation (KEP) – Designs nuclear power plants, provides engineering services
• Anhui Yingliu [Not covered] – Around 15% of revenues, leading supplier to nuclear power plants
• Paladin Energy (OTCQX:PALAF) – Owns 75% of Langer Heinrich mine in Namibia
• KEPCO Power and Supply [Not covered] – Maintenance services for power plants
• Uranium Energy (UEC) – uranium production and exploration company
• Energy Fuels (UUUU) – uranium, production and development company
• Yellow Cake (OTCQX:YLLXF) – Holds physical uranium oxide