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Should You Forget ExxonMobil and Buy Cameco Stock Instead?
Key Points
ExxonMobil has surged 45% this year as oil prices remain elevated.
After a strong year last year, uranium miner Cameco has fallen 11% in 2026.
Rising uranium prices and Cameco's uncommitted future production could help it outperform earnings forecasts.
Energy stocks are getting more attention lately, and for good reason. Electricity demand is booming. On top of that, the ongoing conflict in Iran has put oil markets in the spotlight, and ExxonMobil (NYSE: XOM) stock has surged over 47% since the start of the year. Meanwhile, uranium miner Cameco (NYSE: CCJ) stock is down 11%.
That divergence may be creating an opportunity. Is it time to forget about ExxonMobil and buy Cameco instead?
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I think the answer is yes. Here's why.
Image source: Getty Images.
Why ExxonMobil stock could be peaking
ExxonMobil stock has surged. Brent Crude Oil prices remain above $100 per barrel, driving strong growth for Exxon's integrated oil and gas business.
Analysts project earnings per share of around $13.23 this year, up 90% from last year, and the stock has moved higher to reflect that. That said, the run-up in oil stocks could be closer to its end than its beginning. Exxon trades at 13.3 times its forecast earnings for this year.
What could drive Cameco higher
Exxon's price-to-earnings multiple is far below Cameco's forward P/E of 45, but Cameco could be a better long-term buy right now. That's because the uranium industry has long faced underinvestment. However, as nuclear energy enjoys a resurgence, demand for uranium is expected to surge while supply comes online slowly.
Cameco has contracts to deliver roughly 28 million pounds of yellowcake per year, with most deliveries expected in the next couple of years. However, the company has a large amount of uncommitted volume for 2029 and 2030, which could help it lock in higher prices for future contracts.
Bank of America projects the spot uranium price could surge to $130 per pound, a 44% increase from today's price. If uranium prices remain around $100 over the next two years, Cameco's average realized price is projected to rise to $80, up from $67.79 in the second quarter.
If that's the case, expect Cameco's earnings to grow faster than analysts currently forecast, which is why I think it's a better buy than ExxonMobil right now.
Bank of America is an advertising partner of Motley Fool Money. Courtney Carlsen has positions in Cameco and ExxonMobil. The Motley Fool has positions in and recommends Cameco. The Motley Fool has a disclosure policy.