BWX Technologies Inc. (BWXT-N)

Very profitable, but growth is too slow.

BWXT pays a 0.8% dividend yield, is a $10.6B company, and trades at a fairly expensive valuation of 36X forward earnings. Sales growth has been decent, and margins have held up well over the years. It generates an OK amount of free cash flow, and we think it looks decent as part of a 'pick and shovels' way to play the nuclear energy sector. Expected growth is decent, we would be OK averaging in here as part of a long-term position, while acknowledging it has seen a strong runup recently, and its valuation is stretched.
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Builds and runs small nuclear reactors for the US Navy since 1958. 75% of revenue comes from US government, very stable. Big demand for nuclear power, and they're working through the commercialization process. Hyperscalers need energy. Working with Ontario Power Generation. Recently broke out to new highs. Yield is 0.8%.

It will be a leader in small, modular nuclear reactors over 5-10 years.

BWXT reported a solid quarter recently, with free cash flow rising, demand continuing to be strong and guidance was good. It pays a decent yield of 1%, and analysts expect strong forward earnings growth. Debt remains high, with a total debt to equity ratio of 1.3, but it has done an excellent job of reducing this over the past several years. It is trading at a premium valuation of 32.6X forward earnings, but this partially reflects its strong earnings results and increased guidance. We would be comfortable holding this name while acknowledging that it could consolidate here due to its recent price run up. 
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