I love the outlook for nuclear power and the prospects for uranium — the "other" yellow metal, explains Brett Owens, editor of Contrarian Outlook's Hidden Yields.
Uranium peaked before the Financial Crisis and its price has floundered for the last fifteen years. That’s right. Uranium crashed in 2007, and its price is just now starting to rally. With a fifteen-year windup, yellowcake is poised for quite the pitch:
As with any commodity, it’s all about supply and demand. There are nearly 8 billion human beings on the planet. By 2050, we’ll have nearly 9.8 billion. More people, quite simply, need more electricity. Demand is projected to grow by 75% in the three decades following 2020.
Nuclear power generation will be needed to get us from here to there. And nuclear plants, of course, use uranium as their fuel. Nuclear is considered a clean energy source — even if not technically renewable. Its carbon dioxide emissions score better than feel-good sources like hydropower, geothermal and even solar.
Lower CO2 emissions are required to ensure a livable tomorrow. But the future isn’t our only problem. The world — especially Europe — needs non-Russian energy sources yesterday. That’s why the United Kingdom just announced plans to triple its nuclear power generation. French President Emmanuel Macron is also promising more nuclear power. And more countries on the continent are likely to follow.
Global X Uranium ETF (URA) owns the "who’s who" of uranium plays: Canada’s miner Cameco, the Sprott Physical Uranium fund, and even the national operator of the Republic of Kazakhstan (the largest producer of uranium in the world!).
I prefer URA for our purposes because it irons out operator risk. An individual mining project can go sideways, but yellowcake itself is climbing. URA is a pure play on a "Crash ‘n Rally" setup.
Plus, the fund pays. It dishes out a semi-annual dividend — a fantastic 4.9% over the past twelve months. And that’s up a terrific 328% in only a year. Please buy URA before the next European country announces that it’s going to triple its nuclear output.