With all this volatility, you’d think the Canadian dollar wouldn’t be doing well. But the reverse is true. The loonie continues to climb, now at a five-month high, making it a great time to invest in a Tax-Free Savings Account (TFSA). If you pick the right high-performing stocks, an initial little seed can turn into a big, fruitful tree over time. One stock that’s been showing some serious growth and might be worth a look is Cameco (TSX: CCO), a major player in uranium mining.
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Strong performance
Cameco stock has been on quite the ride over the last five years, shooting up by about 318% at writing! That’s like turning a loonie into almost four loonies! This impressive performance is likely because the company is in the nuclear energy game, and nuclear power is getting a second look as a cleaner way to make electricity. With the whole world trying to cut down on carbon emissions, nuclear energy is gaining popularity, and Cameco is in a good spot to benefit from this trend.
In 2024, the energy stock reported a net profit of $172 million. If you look at adjusted net earnings, that number jumps to $292 million. The adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) also saw a big jump, increasing by about 73% to over $1.5 billion compared to the year before. These numbers show that Cameco is back to producing at full speed, selling more uranium, and getting better prices for it.
More to come
Cameco has also been making some smart moves, like investing in a company called Westinghouse. This has further strengthened their position in the whole nuclear fuel process. In 2024, Cameco’s share of adjusted EBITDA from Westinghouse was a hefty $483 million, which really shows how valuable that investment has been.
The energy stock also has a lot of long-term contracts and a diverse bunch of customers. This helps to keep their revenue fairly stable, so they’re not as affected by short-term ups and downs in the market. Plus, it has a strong financial foundation and is committed to doing things in a sustainable way. All of this suggests that Cameco is well-positioned for continued growth in the future.
Creating income
Now, let’s imagine you decide to invest $25,000 in Cameco within your TFSA. The potential for growth could be pretty exciting. If we assume an average annual return of 15%, which is actually lower than Cameco’s average over the last five years, we can use the Rule of 72 to calculate further gains. In this case, shares would double around every five years. And that’s without even adding more money or reinvesting any potential dividends, which could make your returns even bigger.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | TOTAL INVESTMENT |
| CCO – year 0 | $57 | 438 | $25,000 |
| CCO – year 5 | $114 | 438 | $49,932 |
| CCO – year 10 | $228 | 438 | $99,864 |
| CCO – year 15 | $456 | 438 | $199,728 |
Bottom line
There you have it. In about 15 years, you could have just shy of $200,000! Of course, it’s super important to remember that what happened in the past isn’t a guarantee of what will happen in the future. Investing in the stock market always comes with some level of risk. However, Cameco’s strong financial numbers, its smart strategic moves, and the increasing global demand for nuclear energy make it a compelling option for investors who are thinking about the long term.
