CAMECO CORP. $22.90 (Toronto symbol CCO; TSINetwork Rating: Extra Risk) (306-956-6200; www.cameco.com; Shares outstanding: 390.0 million; Market cap: $8.9 billion; Dividend yield 0.7%) is the world’s largest uranium producer. It supplies over 18% of global production, and has large, high-grade reserves, low-cost operations, significant market share and a number of uranium mines.
Cameco also holds a 31.6% stake in Ontario’s Bruce Power partnership, which operates four of the eight reactors at the Bruce plant, North America’s largest nuclear power complex.
In the three months ended September 30, 2011, Cameco’s revenue rose 25.8%, to $527 million from $419 million a year earlier. It sold more uranium in the latest quarter, and its selling prices also rose. Earnings per share jumped 30.0%, to $0.26 from $0.20.
Cameco aims to nearly double its uranium output, to 40 million pounds, by 2018. Its Cigar Lake mine, which will start up in mid-2013, will contribute much of that increase. Cameco holds cash of $1.3 billion, or $3.33 a share, so it has lots of money for expansion.
Despite last year’s accident at Japan’s Fukushima nuclear plant, long-term demand for nuclear power appears intact. China and other countries, such as India, will likely continue with their nuclear-power expansion programs.
Cameco is still a buy.
