Investing in nuclear energy?

SNN is the symbol for the cotation of Nuclearelectrica S.A. on the BVB stock exchange.

From the name Nuclear, we are talking about a company producing nuclear energy, which in my opinion is clean and safe energy. Also it is the safest and competitive type of energy on the market (even ‘young Sheldon’ tried to build a home-based uranium energy reactor) . Like all energy companies they are having good development strategies.

  • Having a high utilization of installed capacity, thus producing the double capacity of nuclear energy compared to another company using conventional methods
  • No gas emissions (so no global warming). 
  • The low dependency of cost for the produced energy per the cost of uranium. All these are in favor of this company (comparing the thermal companies that need Oil, gas, coal, etc.)

The privatization of Nuclearelectrica S.A. (once a state company) started to sell stocks to private investors around 2013. The price was then between 10-15RON/share (2,3-3,5USD with the current conversation rate), as there were some subscription packs for the number of shares you bought. So it exists on the market for about 7 years, time where we saw a stable company.

In the following chart we can see the current price close to the opening price from 2013 and the stocks is on an ascendant trend.

But why SNN?

But why did we choose SNN in terms of investments? Usually the Nuclear-energy is not that interesting to some investors.

  • In the last years, Nuclearelectrica has gained momentum, their share price gaining 8-10-14% per year
  • They were voted multiple years for the best dividend yield on the BET index
  • consistent gains in the past years
  • as Romania is the main shareholder, it is normal that they distribute 90% of the profit in the form of dividends, that is around 14% dividend this year
  • there are rumors and plans that they will improve one of their units in the next years
  • Romania transition to ’emergent market’
  • Overall I like their plans for the future

The price of SNN

As we started investing this year, this is the graph since the beginning of the year until now. Most of our acquisitions are between 14.68 and 15.24RON and my medium-cost is 15.18RON (@3.67USD). At the moment there is a modest gain for our investment (3%).

Bus still, why so much SNN ?

The current portfolio allocation is 27,4% in SNN (if I take into consideration the medium price of acquisition and 31.4% if taken into consideration today selling price).

So why that much ?

“Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years”

Warren Buffett

And for the following reasons: green energy, good company with good prospects and high yield dividends. With the current situation, Nuclearelectrica is the company that recovered the fastest from this unfortunate event (we will always need the energy).

These are my 2 cents on this company, which I like very much (and was encouraged to study by a close friend). I will let everybody draw their own conclusions. I am open to all feedback and would love to chat with you if it’s a good or bad investment.

Thank you for reading this!

Disclaimer: I am not a financial consultant, all the information you find here are my decisions, I taken in that moment, on my own analysis. I am open to any type of discussion about money. If you want to replicate my portfolio take into consideration that it is your money.

P.S. the quotation of SNN can be found here: BVB

P.S.S. the headline image by slightly_different from Pixabay

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