Forget Money Markets, Here Is How You Can Earn Massive 11% Yield

Company Overview - BWX Technologies (BWXT) is currently trading at approximately $174.37 per share, which is about 19% below its 52-week high, as investors are weighing valuation concerns against long-term nuclear energy trends [2] - The company holds a virtual monopoly on manufacturing naval nuclear reactor components and fuel for the U.S. Navy, supported by multi-billion dollar, multi-year sole-source contracts [12] Investment Strategy - A potential investment strategy involves selling long-dated Put options with a strike price of $125, which could yield an annualized return of 11% at a 30% margin of safety [4] - If BWXT shares remain above $125, the investor retains the premium of approximately $782 per contract, equating to a 6.3% income over the next 340 days [6] - If shares fall below $125, the effective cost basis for acquiring the stock would be $117.18 per share, representing a 33% discount from the current price [6] Competitive Advantage - BWXT's economic moat is classified as wide, primarily due to high switching costs and significant barriers to entry in the nuclear reactor manufacturing sector [9] - The company benefits from long-term government contracts, which create a stable revenue stream and indicate a strong relationship with its primary customer [12] Industry Outlook - The nuclear energy sector is projected to grow at a compound annual growth rate (CAGR) of 5.4% to 42.31%, driven by trends in decarbonization and electrification [9] - The growth in the commercial nuclear sector, particularly with Small Modular Reactors (SMRs), presents significant upside potential for BWXT [8] Financial Position - BWXT has a significant net debt position of $1.5 billion as of September 2025, but this is manageable due to strong operating cash flow within the capital-intensive defense industry [10] - The company generates positive free cash flow, which supports its financial stability [10]