Canada is one of the biggest suppliers of uranium globally. The past few years though have been challenging for the uranium market. Uranium prices have tumbled following the Fukushima power plant accident in Japan five years ago. However, the outlook for uranium market is extremely bullish. This is due to an anticipated rise in demand and potential supply deficit.
Demand is expected to be driven by China and India. Both countries see nuclear power as an important part of their energy mix and have been investing heavily in reactors. At the same time, years of low prices has led to underinvestment in uranium mines. Just as demand will pick up, uranium market is expected to see a supply deficit. This makes betting on uranium miners an attractive proposition.
Cameco Corporation (TSX: CCO), a Saskatoon, Canada-based uranium miner, is one of the best bets in the uranium space. Not only is CCO one of the biggest suppliers of uranium, it is also well-positioned to capitalize from the anticipated recovery in uranium prices. Importantly, CCO offers steady income apart from the prospect of long-term capital appreciation. CCO currently offers a yield of 2.43%, which is on the lower side. However, the company has an excellent track record when it comes to dividend payments.
