Cameco (NYSE:CCJ) is the best uranium company on the planet. Its vertically integrated business model gives investors direct exposure to the nuclear power renaissance. The only other large, vertically integrated, public company that's readily investable is French giant Areva (OTC:ARVCF). Areva has operations all over the world, but most notably in Niger where it operates two multi-million pound uranium mines. Areva has had well-publicized problems renegotiating mine operating deals in Niger. It recently signed a new 5-year deal agreeing to pay up to 12% in royalties from just 5.5% previously. Areva is a higher risk play than Cameco as it needs higher uranium prices to thrive. 

Cameco has far and away the best uranium assets
Unlike Areva's assets in risky places like Africa, Cameco's assets are almost entirely in Canada and the U.S. In Canada, Cameco dominates the Athabasca region of Saskatchewan. This is highly important because the uranium grades there are up to 100 times greater than in most other uranium mining regions. Denison and a number of junior uranium companies have assets in Saskatchewan, but those companies are years away from first production. 

Cameco's McArthur River mine produced 14 million pounds of uranium in 2013. This low-cost mine is one of the largest and most profitable in the world. It's a tremendous cash cow for Cameco. Even more exciting looking forward is the company's Cigar Lake operation that just went into production this year. Cigar Lake could grow to an astonishing 18 million pounds of annual production by the end of the decade. Importantly, that's only if market conditions warrant that supply growth. 

In total, Cameco has the capacity to expand to 36-38 million pounds per year with the vast majority coming from McArthur River and Cigar Lake. No other company has this kind of upside, which makes Cameco a good long-term buy. 

But, current uranium market conditions couldn't be worse
Due in large part to the terrible Fukushima incident that hit Japan in March, 2011, the global supply or uranium used to fuel nuclear reactors has overwhelmed demand. Japan has 50 operable reactors, about 1/8th of the world's supply, but all 50 are offline. Therefore, the spot price of uranium has fallen by 60% from the low $70's per pound to an 8-year low of $28 per pound. Once Japan begins turning its reactors back on, sentiment could change, sending uranium prices higher. 

Cameco will be a good stock to own when spot prices rebound. It offers compelling risk reward compared to peers like Paladin Energy (OTC:PALAF). Like Areva, Paladin has operations in Africa which are high-cost and low-grade, especially compared to mines in Saskatchewan. Paladin is also saddled with a large pile of debt relative to its market cap. Net debt is twice its market cap. I think Paladin is too risky to bet on at this time.

An interesting high-beta play
Like Cameco, Denison Mines (NYSEMKT:DNN) has great assets in Canada, but the company is years away from first production. Denison is a 60% JV partner with Cameco on the Wheeler River Project. Denison also owns 22.5% of a key uranium mill in the region, making the company a widely anticipated takeout target. Denison is a high-beta play on uranium that could be a good bet if one thinks that the uranium spot price will spike higher later this year. 

Rarely does a single company dominate an industry the way that Cameco dominates the uranium sector, especially in North America. In the long run, nuclear power will continue to play a very important role in the world's energy needs. Cameco is already a leader, one of the largest producers of uranium, and has the capacity in place through Cigar Lake to add up to 18 million pounds of annual supply. That is why I think Cameco is a great company and an attractive long-term buy.