Uranium Energy (NYSEMKT: UEC) stock eked out a 2.1% gain through 3 p.m. ET Tuesday after RBC Capital analyst Andrew Wong initiated coverage of its rival, Littleton, Colo.-based uranium miner Ur-Energy (NYSEMKT: URG).
There was no other notable news to explain Uranium Energy's move, not even a spike in uranium prices -- which are actually down slightly today.
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RBC loves Ur-Energy
RBC's Wong likes the prospects for nuclear power use in the U.S., and especially likes companies that provide reliable uranium supply to the U.S. As a U.S.-based uranium producer, Ur-Energy fits this bill.
So, too, does Corpus Christi, Tex.-based Uranium Energy.
NYSEMKT: UEC
Key Data Points
What this means for Uranium Energy stock
RBC hasn't yet endorsed Uranium Energy stock, but investors may be betting that interest in Ur-Energy could put Uranium Energy on the analyst's radar as well. According to data from S&P Global Market Intelligence, the two companies share similarities -- with Uranium Energy modestly more attractive as an investment.
Both companies generate revenue -- $20 million over the past 12 months for Uranium Energy; $31 million for Ur-Energy. Neither is currently profitable, with Uranium Energy last reporting a profit in 2022 and Ur-Energy in 2018. Both companies are burning cash, but net cash-positive on their balance sheets to absorb the losses, with Uranium Energy possessing significantly more cash than Ur-Energy -- $488 million versus only $2 million in debt.
At its current cash burn rate of about $120 million per year, that gives Uranium Energy four more years to prove it can build a viable business model. And the best news of all?
Most analysts agree Uranium Energy will move much faster than that, turning both profitable and free cash flow-positive next year. Of the two uranium stocks, Uranium Energy seems the safer bet.
