3 Nuclear Energy Stocks to Scoop Up Now for Long-Term Upside

Nuclear energy has enjoyed a renewed wave of investor interest this year, driven by rising demand for reliable, carbon-free power sources. As the world faces an energy crunch amid soaring demand for artificial intelligence (AI) advancements and intensifying calls for climate action, nuclear power has reemerged as a frontrunner, attracting fresh investments and high-profile partnerships from tech giants eager to power their AI ambitions sustainably without adding to their carbon footprints. With major corporations and governments rallying around nuclear power, it’s becoming the go-to solution for scalable, low-emission energy.

In fact, investments in nuclear energy are projected to skyrocket to a stunning $80 billion by the end of this year, nearly doubling since 2018, as part of an unprecedented global energy investment boom. Despite this bullish backdrop, some of Wall Street’s top nuclear stocks earlier this month faced a temporary dip after the Federal Energy Regulatory Commission (FERC) turned down Talen Energy’s (TLN) plan to boost power capacity at its Susquehanna nuclear plant, a project aimed at supplying an Amazon Web Services (AWS) data center.

This regulatory setback sparked fears of future obstacles, leading to profit-taking among nuclear stocks that had been riding a wave of optimism. However, Amazon’s (AMZN) firm commitment to “advancing carbon-free energy solutions with companies like Talen Energy” quickly revived investor confidence, and highlighted nuclear’s long-term role in the clean energy landscape.

In light of these recent developments and the skyrocketing demand for clean energy solutions, these three nuclear energy stocks could be ideal buys now.

Nuclear Energy Stock #1: Constellation Energy

Baltimore-based Constellation Energy Corporation (CEG) leads the nation as one of the largest producers of clean, emissions-free energy, serving homes, businesses, community groups, and three-fourths of Fortune 100 companies across the U.S. With a powerhouse lineup of hydro, wind, solar, and the country’s largest nuclear fleet, Constellation generates nearly 90% carbon-free energy, enough to power 16 million homes and supply about 10% of America’s clean energy needs.

Constellation aims for 100% carbon-free generation by 2040, and is driving the shift by helping clients achieve sustainability goals and investing in breakthrough tech to decarbonize all sectors. Valued at a market cap of around $70.6 billion, shares of this nuclear energy giant have rallied almost 79.8% over the past year, easily eclipsing the broader S&P 500 Index’s ($SPX)32.7% return over the same time frame.

Beyond its stellar price performance, the company has also been rewarding its shareholders through dividends. On Nov. 1, Constellation Energy announced a quarterly dividend of $0.3525 per share slated to be distributed to its shareholders on Dec. 6. Its annualized dividend of $1.41 per share offers a modest 0.62% yield. Also, the company maintains a conservative payout ratio of 22.32%, leaving plenty of room for further dividend enhancements.

Constellation reported stellar Q3 earnings results earlier this month, which crushed Wall Street’s forecasts. The company’s operating revenues of $6.6 billion soared 7.2% year over year and smashed Wall Street’s projections by 42.7%. On an adjusted basis, the company’s operating earnings of $2.74 per share climbed an impressive 28.6% annually.

Constellation Energy’s nuclear fleet, bolstered by its stakes in the Salem and South Texas Project (STP) Generating Stations, delivered a powerful 45,510 gigawatt-hours (GWh) in Q3 of fiscal 2024, outshining the 44,125 GWh produced in the same period last year. Plus, in a landmark move for clean energy, Constellation signed a 20-year power purchase agreement (PPA) with Microsoft (MSFT) during the quarter to bring new life to the retired Three Mile Island Unit 1, now renamed the Crane Clean Energy Center.

Set to restart in 2028, the revitalized plant will power Microsoft’s data centers in the PJM region with clean energy, aligning with Microsoft’s sustainability goals. CEO Joe Dominguez highlighted the crucial role of AI and the data economy in America's competitiveness and national security. 

Management raised its fiscal 2024 adjusted operating earnings outlook, now projecting a range between $8.00 per share and $8.40 per share, up from the earlier guidance of $7.60 per share and $8.40 per share. 

CEG stock has a consensus “Moderate Buy” rating overall. Out of the 18 analysts offering recommendations for the stock, 11 suggest a “Strong Buy,” and the remaining seven have a “Hold” rating.

The average analyst price target of $275.82 indicates a 21.2% potential upside from the current price levels. 

Nuclear Energy Stock #2: Vistra Corp

Texas-based Vistra Corp. (VST) serves customers from California to Maine, operating a diverse fleet of natural gas (NGZ24), nuclear, coal, solar, and battery energy storage facilities. Earlier this year, Vistra received a 20-year license renewal for its Comanche Peak plant, a key part of its nuclear portfolio.

With a market cap of around $48.3 billion, shares of Vistra have delivered a stunning performance over the past year, up 301%.

Vistra is dedicated to rewarding its shareholders with a balanced combination of dividends and buybacks. On Oct. 30, the company declared a quarterly dividend of $0.2215 per share, set to be distributed to its shareholders on Dec. 31. With modest yield of 0.62%, and a sustainable 35.89% payout ratio, Vistra’s dividend is well-covered.

Since November 2021, Vistra has been on a share repurchase spree, snapping up nearly $4.6 billion in stock and slashing its outstanding shares by a hefty 30%. And in its latest earnings release, Vistra's board greenlit another $1 billion for buybacks, leaving around $2.2 billion authorized for repurchase as of Nov. 4.

Shares of Vistra rose more than 7% on Nov. 7 after the company’s Q3 earnings report exceeded Wall Street’s expectations. Operating revenue of $6.3 billion climbed an impressive 53.8% year over year, while earnings of $5.25 per share crushed estimates by a whopping 323.4%.

As of Sept. 30, Vistra held $905 million in cash and cash equivalents, along with $2.5 billion ready to tap from its corporate revolving credit facility and an additional $633 million tied to its commodity-linked credit line.

During the quarter, Vistra energized its clean energy push, locking in two powerhouse solar deals with global tech leaders. These new agreements bring over 600 MW of solar power to the table, with Amazon committing to 200 MW in Texas and Microsoft securing 405 MW in Illinois.

Vistra increased its 2024 guidance, projecting adjusted EBITDA to range between $5 billion and $5.2 billion, while adjusted free cash flow before growth (FCFbG) is anticipated to range between $2.65 billion and $2.85 billion.

Overall, Wall Street is highly optimistic, with a consensus “Strong Buy” rating for VST stock. Of the 12 analysts covering the shares, 11 advise a “Strong Buy,” and one recommends a “Moderate Buy.”

The average analyst price target of $157.50 indicates a potential upside of 11.3% from the current price levels.

Nuclear Energy Stock #3: Entergy Corporation

Founded in 1913, Louisiana-based Entergy Corporation (ETR) powers 3 million customers across Arkansas, Louisiana, Mississippi, and Texas. ETR produces and distributes electricity, owns a natural gas distribution network, and also owns and operates a fleet of nuclear reactors.

Valued at $31.6 billion by market cap, shares of this utility company, like Constellation and Vistra, have outperformed the broader market, posting returns of almost 50.2% over the past 52 weeks.

Entergy has a nine-year streak of consecutive dividend increases and a hefty 68.85% payout ratio. On Oct. 25., the company declared an increase of $0.07 per share in its quarterly dividend to $1.20 per share, which translates to a 3.25% yield.

Following the company’s Q3 earnings results on Oct. 31, shares of Entergy popped 15.2%.  Although Entergy’s total operating revenue dipped slightly year over year to $3.4 billion, falling short of Wall Street’s expectations, the company delivered a pleasant surprise with stronger-than-forecast earnings of $2.99 per share. 

Entergy’s Board of Directors, in its Q3 earnings release, officially approved a two-for-one split of its common stock, doubling the shares held by each shareholder and lowering the per-share price. Effective as of Dec. 13, this split reflects Entergy’s confidence in its growth outlook and aims to make its stock more attractive to a broader base of investors.

For fiscal 2024, Entergy expects EPS of $7.15 per share to $7.35 per share (pre-split). Analysts tracking Entergy project the company’s bottom line to climb 6.5% year over year to $7.21 per share in fiscal 2024, and rise another 7.4% to $7.74 per share in fiscal 2025.

ETR stock has a consensus “Moderate Buy” rating overall, and trades close to its mean price target of $149.03. Of the 18 analysts covering the stock, 11 suggest a “Strong Buy,” one recommends a “Moderate Buy,” and the remaining six maintain a “Hold” rating.