Uranium miner Cameco Corp (NYSE:CCJ) is still struggling through a pricing downturn for the nuclear fuel. Diversified miner Teck Resources Ltd (NYSE:TECK) has benefited from rebounding commodity prices and is set to further diversify its business this year. Which miner is right for you depends on your risk appetite, but most investors should probably stick with the company that's spreading its bets.

Uranium's potential

If you are looking for exposure to the nuclear fuel uranium, then don't bother with Teck -- the miner has no exposure to that commodity. For uranium Cameco Corp is the right choice. And it's not a bad option if that's what you want. For example, despite uranium prices hitting a 12-year low in 2016, from which they have yet to really recover, Cameco's balance sheet remains in rock solid shape.    

A mine engineer in front of mine equipment

Image source: Getty Images

To put some numbers on that, long-term debt only makes up about 20% of the company's capital structure. And its current ratio is around 5.75, suggesting it could pay its near term bills an incredible five times over. Cash on the balance sheet, meanwhile, was more than twice the level of a year ago at the end of the second quarter. Cameco is prepared to fight its way through a rough market.     

Which is good news because the uranium market continues to languish. And that's the problem with Cameco. It does one thing and is ready to deal with hard times, but until uranium turns higher it will continue to suffer. And it's been difficult of late, with earnings dipping into the red last year and management expecting earnings to do the same in 2017. There are some long term trends that appear positive for Cameco and the uranium market, like new nuclear power plant construction in Asia, but you have to have a strong stomach to invest in Cameco.    

Diversified matters

Which is why most investors would be better off with Teck. Teck mines for steelmaking coal (56% of second quarter revenues and 73% of gross profit), copper (about 20% of revenues and 12% of gross profit), and zinc (the remainder of each). In fact, after a long and painful commodity downturn, Teck is starting to put up impressive numbers.    

a line chart showing recent volatility in the met coal market

Steelmaking coal has been a bit of a roller coaster of late.

For example, the miner's second quarter coal production and shipments were at record levels. Zinc production also hit a record. And prices for all three of its main commodities were higher year over year. Then there's the company's Fort Hills oil investment, which should start producing late in 2017 with full production reached in around 12 months. That will add a fourth major commodity to the mix and remove a cash drain that's been worrying investors.    

That said, you could look at the above revenue and gross profit numbers and come away feeling that Teck is really a coal miner, which is true to some degree. However, when times were tough for that steel making ingredient, which was not too long ago, copper and zinc helped to diversify the company's revenues and support the overall business. And adding a fourth commodity, oil, gives the miner even more diversification. Cameco doesn't have that offset for its uranium business.

Different stages

Now, to be fair, the market has noticed that the commodities Teck produces have rebounded. The shares are well off the lows reached during the commodity downturn. Cameco's shares, on the hand, continues to languish since uranium hasn't really rebounded. Cameco probably has better upside potential at this point, but only if you can stomach the continuing troubles in the uranium market.

CCJ Chart

CCJ data by YCharts

For most investors, Teck's more diversified business model is likely the better choice. There will be ups and downs, for sure, but the mix of four commodities should provide for a smoother ride, overall.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.