It’s no secret that Cameco (TSX: CCO) is one of the best-known Canadian stocks for investors looking to benefit from growing demand for uranium.
And with countries consistently needing more energy and electricity, there are a tonne of reasons why nuclear power is becoming a bigger priority.
Even here in Canada, the federal government released a new nuclear strategy earlier this year that aims to double uranium exports from 2024 levels by 2035, while expanding uranium production and nuclear fuel opportunities.
However, what makes Cameco especially compelling is that its opportunity goes well beyond producing uranium, with its investment in Westinghouse giving it exposure to the technology and services nuclear plants need.
So, while Canada’s uranium push gives investors another reason to look at Cameco, understanding that broader business is essential when deciding whether the stock deserves a place in your portfolio.
Why Canada’s uranium push matters for Cameco
One of the biggest advantages Cameco has is that it already operates major uranium mines and has established relationships with utilities around the world.
That matters because expanding nuclear power requires a reliable supply of fuel, and bringing new mines into production takes years, giving experienced producers with operating assets a significant competitive advantage.
For example, earlier this year, Cameco signed a nine-year uranium supply agreement with India, with deliveries expected to begin in 2027 and an estimated contract value of roughly $2.6 billion. That’s the kind of long-term business it can secure as countries around the world expand their nuclear capacity.
Furthermore, its uranium opportunities aren’t limited to customers choosing Westinghouse’s technology, since utilities using other reactor designs need uranium too.
That’s what makes the combination with Westinghouse so compelling, because Cameco can benefit from growing fuel demand across the industry while also owning part of a business helping countries expand their nuclear capacity.
Why Westinghouse makes Cameco stock more compelling
While Cameco is primarily known as a uranium producer, and for good reason since it’s one of the largest in the world, it also owns a stake in Westinghouse. In fact, Cameco owns 49% of the business, which it acquired in partnership with Brookfield Renewable Partners and its institutional partners in 2023.
And that’s a significant investment because Westinghouse is one of the world’s largest nuclear services businesses, providing reactor technology, equipment and ongoing support to utilities around the world, giving Cameco several additional ways to benefit as more money goes into nuclear power.
For example, by July, six reactors using its AP1000 design were operating, and another 14 were under construction, showing that its technology is already being used and expanded internationally.
And the opportunity continues long after a new reactor begins producing electricity, since those facilities need fuel, maintenance, replacement equipment and other services throughout their operating lives.
In fact, Westinghouse already provides services to roughly 63% of the world’s operating reactors, giving it an established business alongside the potential from new projects.
That’s particularly compelling for long-term investors, because new reactor projects can create years of engineering and equipment work while also adding future customers for the fuel and services needed to keep those plants running.
Of course, Cameco already trades at a premium at roughly 52 times forward earnings, so the case for buying rests on how much its uranium operations and Westinghouse can earn over the coming years.
So although you’ll want to keep its valuation in mind, Cameco is still one of the highest-quality stocks to buy and hold for long-term investors, especially if you want exposure to nuclear power through a company with several ways to grow as the industry expands.
