The Russia-Ukraine war is heating up…
And as the situation continues, talk of Russian President Vladimir Putin using nuclear weapons is making regular folks nervous.
But the thing is, the risk of a nuclear bomb going off is low…
That’s because of “mutual assured destruction” (“MAD”), a foreign-policy term coined in 1962 at the height of the Cold War. MAD served as the ultimate deterrent to a nuclear war with the Soviet Union.
The idea was – and still is – that any nuclear attack would lead to MAD. Each party would completely annihilate each other with nuclear weapons, perhaps hundreds of them.
So MAD is the primary reason why Putin won’t use a nuclear weapon in the conflict with Ukraine. The consequences are just too dire.
But today, we do need to talk about another nuclear option coming out of this conflict. The Power Gauge first spotted it back in August.
In short, given what’s happening in Ukraine, the world is collectively reevaluating this option. Putin might not go nuclear. But it’s looking more and more like the world has to…
The war in Ukraine is making it painfully obvious…
Despite all the talk of “going green,” we’re still highly dependent on fossil fuels. And we’re not just talking about rising oil prices…
We’re starting to see a jump in electricity prices, too. Why? Because utilities will need to pass on the increased costs of burning fossil fuels to create electricity to consumers.
Regulations mean these utilities are allowed to pass those costs on to us. So in the end, when it comes to higher electricity prices, we have little choice as consumers but to grin and bear it.
But fortunately, as investors, we can try to offset at least some of the higher costs with the right stocks. And that brings us to the world’s shift toward nuclear energy…
You see, one U.S. utility company generates the majority of its power from carbon-free sources like nuclear energy. Its fact sheet shows that nuclear and green-energy power plants account for about 90% of its overall power generation. And with a market cap of around $16 billion, it’s “the nation’s largest producer of carbon-free energy.”
I’m talking about Constellation Energy (CEG).
The company serves more than 20 million homes and businesses. And importantly, the uranium fuel rods at Constellation’s nuclear power plants are already in place. Unlike a coal power plant that needs to buy coal at whatever the market rate is (which is at its highest level since 2008), the fuel rods in a nuclear power plant last for years.
So in other words, it won’t cost Constellation any more money to produce a megawatt hour from its nuclear power plant in Limerick, Pennsylvania this year than it did last year.
But if the price of power goes up, Constellation’s profit margins will go up, too. And as we’ve noted, the price of power is rising right now due to the skyrocketing costs of fossil fuels.
The Power Gauge saw Constellation’s potential upside all the way back in August. That happened while the utility was still under a larger company, Exelon (EXC).
But earlier this year, Constellation was spun into its own company. Its stock now trades on the Nasdaq. That makes Constellation the best nuclear-energy play available to investors.
In today’s tumultuous market, it’s a smart move to add a utility like this to your portfolio.
Folks, the world is on the edge of its seat trying to figure out whether Putin will “go nuclear” or not. And at the same time, energy prices are surging due to all the fear and uncertainty.
So as odd as it might seem, now is the time to add your own nuclear arsenal. Look at Constellation and the company’s 90% exposure to nuclear and green energy today.
Good investing,
Carlton Neel
