Uranium is one of the most specialized chemical elements on the planet. Its commercial use is limited to fueling power plants and making weapons. The best uranium stocks to buy now are those that have an inside track on those markets.

The nuclear energy sector has undergone considerable change during the past decade. You may recall that a nuclear power plant in Fukushima, Japan melted down in 2011, as explained in this video:

As a result, many countries cut back or curtailed their plans to expand nuclear energy. The price of uranium fell steadily over the next several years, bottoming out below $20 a pound in November 2016.

Many uranium mines closed in the aftermath of the Fukushima disaster. Since then, the price of uranium has gone up as some countries have renewed their nuclear energy projects. The mines that remained open are now reaping the benefit as demand for uranium rises.

In addition, demand for all types of power, including nuclear, is expected to surge in Asia over the next 10 years. The middle-class populations of China and India are rapidly expanding, driving growth in the housing sector. Houses use a lot of electricity for lighting, appliances, and HVAC systems. By 2035, the demand for electricity is projected to increase by 50% over recent levels.

How Do You Determine What Qualifies as the Best Uranium Stocks?

Six countries account for nearly 90% of the world’s uranium production. Of those, we prefer companies operating primarily in North America and Australia. We avoid companies operating in Africa and Russia due to increased security threats and political instability.

The best uranium stocks are mining companies that can extract uranium at the lowest cost. If my colleague Robert Rapier’s outlook for the utility sector in 2019 proves correct, rising oil prices may increase demand for cheaper sources of energy.

Uranium sales are closely tracked by the United States and other countries. For that reason, you need to know who is buying the uranium from each producer. The imposition of a uranium import ban on a major buyer could quickly put a company out of business.

Also see: “5 Predictions for Investors in 2019“

What are the Best Uranium Stocks?

If you’re in a hurry, below are our picks for the best uranium stocks to buy now.

1. Cameco: Canadian miner with strong ties to China.
2. Energy Fuels: Colorado company with an inside track on U.S. defense spending.
3. Global X: Uranium exchange-traded fund (ETF) provides diversification.

Keep reading to find out more about each of the best uranium stocks.

Cameco (NYSE: CCJ)

What is it?

Cameco, based in Canada, is one of the largest uranium companies in the world with a market capitalization of $5 billion. It has 55 nuclear reactors under construction around the globe, with several more in planning stages. It owns a 50% stake in the world’s biggest uranium mine (Cigar Lake) and 70% interest in the world’s second-biggest mine (McArthur River).

Cameo operates through three divisions involved in uranium mining, power generation, and defense contracting. For that reason, Cameco can shift resources into its highest-margin businesses according to market dynamics.

Why is it one of the Best Uranium Stocks to Buy Now?

Cameco has partnered with China, which has 17 nuclear reactors in development. China’s reliance on coal to fuel its power plants has resulted in some of the worst smog conditions in the world. Now, the country is spending heavily on nuclear power to provide a much cleaner alternative to coal.

In addition, some of the countries that halted nuclear reactor construction after Fukushima, including Japan, have recently restarted those programs. As more nuclear plants come online, Cameco can ramp up uranium production to meet the demand.

Energy Fuels (NYSE: UUUU)

What is it?

Energy Fuels, headquartered in Colorado, operates the only fully licensed conventional uranium mill in the U.S. A mill extracts uranium from ore that has been mined but is still in its raw form. The company operates nine production facilities located in six states.

Energy Fuels is also the only domestic producer of vanadium, a chemical byproduct of uranium mining. Vanadium is used to produce steel that is stronger and more rust resistant than conventional steel. For that reason, it has strategic value for military applications in addition to its commercial usage.

Why is it one of the Best Uranium Stocks to Buy Now?

The U.S. government is putting enormous pressure on other countries to discontinue their uranium production, to reduce the risk of nuclear weapons falling into the wrong hands. Instead, the U.S. would prefer that uranium for nuclear energy be obtained only from trusted sources.

Since Energy Fuels operates the only uranium mill in the U.S., it is uniquely positioned to sell to defense contractors and the American military. With geopolitical tensions escalating and the U.S squaring off against Russia and North Korea, Energy Fuels could experience a surge in demand for its uranium and vanadium products.

Global X Uranium ETF (URA)

What is it?

Global X Uranium ETF owns every major uranium mining stock in the world. Its top holding is Cameco, which represents roughly 20% of its total assets. In addition to uranium miners, URA also owns shares of engineering, construction, and utility companies in the nuclear energy industry.

Over the past three years, URA gained 3% while the price of uranium fell by 17%. It has net assets of approximately $265 million, more than ten times the $25 million of assets held by the only other uranium ETF, VanEck Vectors Uranium+Nuclear ETF (NLR).

Why is it one of the Best Uranium Stocks to Buy Now?

Mining for uranium is an inherently risky business, so owning an ETF of dozens of companies reduces the overall volatility of your portfolio. It also ensures that you will participate in an uptick in global demand for uranium products.

Also, many of the companies in URA’s portfolio are able to generate profits even when the price of uranium is falling. Some of them are in other businesses in addition to uranium mining, such as oil exploration. That allows them to focus production on their most profitable products as commodity prices rise and fall.

Owning this ETF gives you broad exposure to the uranium industry, if you aren’t sure which uranium stock is right for you.

One thing is for sure, though: my colleague Jim Fink knows how to pick investment winners. As the chief investment strategist of Options For Income, Jim has developed a “profit calendar” trading system that allows you to collect payments every Thursday, similar to a paycheck.

These “paychecks” can range in value from $1,150 to $2,800, but average out to $1,692.50. Jim built a fortune of over $5 million starting with $50,000, although you don’t need that much to get started using his strategy. Now, he’ll teach you the three simple steps to follow his example. Click here for a free demonstration.