BWX Technologies Already Builds Reactors for the Navy. Why Is It Still the Cheapest Nuclear Stock?

There are nuclear stocks trading at lower valuations than BWX Technologies (NYSE: BWXT), including Constellation (NASDAQ: CEG) and Duke Energy (NYSE: DUK), large utility companies that use nuclear power, but compared with its peers, BWX stock is still a steal. The stock is down more than 7% so far this year.

Hot nuclear stocks GE Vernova (NYSE: GEV), NuScale Power (NYSE: SMR), Oklo (NYSE: OKLO), Cameco (NYSE: CCJ), and Uranium Energy (NYSEMKT: UEC) all trade at higher valuations than BWX whether you look at trailing price-to-earnings (P/E), forward P/E, or price-to-sales (P/S) ratio.

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BWX may not be the flavor of the month, but that presents an opportunity for investors. The stock benefits from a near-sole-source monopoly supplying nuclear reactors and high-assay enriched fuel for the U.S. Navy's submarine and aircraft carrier fleet. Here are three reasons to buy this stock now.

In the second quarter, the defense company reported $901.6 million in revenue, up 18% year over year, driven by expansion in government and commercial nuclear services. It also reported $1.07 in earnings per share (EPS), a 5% increase from the same quarter a year ago.

The company recently signed more than $1.4 billion in contracts with the U.S. Navy to support its Nuclear Propulsion Program, including a five-year, $1.3 billion long-lead material procurement deal and $165 million to procure long-lead time nuclear system components and manufacturing to support the Navy's Ford-class aircraft carrier program.

BWX carries a backlog of more than $8.6 billion, giving it multiyear revenue visibility that insulates it from broader economic downturns.

The company was confident enough to raise its yearly revenue guidance to $3.8 billion, up 61.7%, and non-GAAP EPS of $4.70 to $4.80, up 18% at the midpoint.