Best lithium stocks for long-term growth

Lithium is an integral part of the manufacture of rechargeable batteries. In recent years, the need for environmentally friendly energy sources has become a must. Lithium is used in batteries that are used for portable devices such as smartphones and tablets. It is also used in the development of batteries for electric vehicles, the production numbers of which have risen sharply since the beginning. Hence, we bring you the top five lithium stocks to invest in.

Investing in lithium is becoming increasingly popular. Joe Biden reiterates his government’s pledge to generate 80% of US electricity from renewable sources by 2030. This paves the way for lithium mining and manufacturing companies as lithium stocks continue to grow.

Almost all commercial battery-based energy solutions use lithium compounds. According to the US Geological Survey, more than 70% of the world’s total lithium production is invested in batteries.

Albemarle Corporation

Albemarle (ALB) is one of the largest suppliers of lithium for batteries that power electric vehicles. The company produces both types of lithium, carbonate and hydroxide, and sources it through brine and rock mining. In addition, Albemarle also produces a range of lithium products for a number of other industries.

Albemarle is working to grow its lithium business as the company predicts increasing demand in the near future. ALB through its UK based subsidiary Albemarle Lithium UK Limited is ready to acquire Guangxi Tianyuan New Energy Materials. Tianyuan is a lithium converter based in Guangxi, China. This acquisition will help Albemarle expand its presence around the world. Tianyuan’s lithium capacity will enable ALB to help customers achieve their growth and sustainability goals.

ALB stock looks super cool as the fundamentals are exciting to an investor. The company increased its working capital to $ 976.85 million over the past 12 months. Compared to $ 798.91 million and $ 719.37 million in 2020 and 2019, respectively. This is a great sign to support short-term goals.

Debt also goes down, which is great for a company with plans to expand. Revenue has only grown 2.10% over the past five years, but that’s remarkable given that the industry is still in its early stages. Revenue will increase in the future as demand increases. ROE and ROI are also good at 13.90% and 5.60%, respectively. The EPS is expected to increase nearly 30% over the next five years, which is great.

Chilean Chemical and Mining Society

Sociedad is a Chilean (SQM) chemical company and one of the world’s leading lithium producers. The company has the massive advantage of having one of the largest lithium reserves in its home country. Just like its counterpart Albemarle, SQM is accelerating the expansion of lithium production in the face of increasing demand. In addition, the company also benefits from the production of potassium nitrate and iodine.

Sociedad focuses on increasing capacity, productivity and deals. The company expects to grow its production to 180,000 tons over the next 12 months, more than four times what it was three years ago.

The SQM share has done exceptionally well this year, with the holding up 53.72% so far. Quarterly sales rose by almost 28.20%. While the EPS is expected to be around 42% over the next five years. ROE and ROI are 9.50% and 5.70%, respectively. That’s pretty good too.

Insiders hold around 72.40% of SQM’s shares compared to 37.50% owned by institutional investors. That’s a good sign, because both insiders and outsiders have great confidence in the company and its shares.

SQM’s fundamentals are looking good and the company has solid operational capacity. We can see the stock high in the ranks for the next few years.

Piedmont Lithium Inc.

Piedmont Lithium (PLL) is a world-class integrated lithium company focused on enabling the transition to a net-zero world and the creation of a clean energy economy in America. The company aims to be the largest North American lithium hydroxide supplier.

Piedmont recently hired Krishna McVey as Vice President of Human Resources. Ms. McVey brings a broad, multi-dimensional background in human resources to Piedmont. This includes experience in all aspects of labor and labor law as well as human capital management.

Just like ALB and SQM, PLL also belongs to this growing market segment. The focus of Piedmont is on the development of lithium hydroxide, which is used in batteries for electric vehicles. We know that the electric vehicle industry is growing and so is the demand for lithium. Piedmont’s ambitions look good for the stock in the long run.

If we look at the data from PLL, the stock looks solid. The company has improved its working capital over the past 12 months compared to the past two years. This will help the company a lot in meeting its urgent needs and increasing its production. Working capital increased to $ 116 million during this period, from -190 million and -382 million in 2020 and 2019, respectively. In addition, total debt has decreased in the last 12 months compared to the last two years, which is is also a great sign.

The EPS for the next year is expected to increase by 36.41%. The analyst firm Wells Fargo recently upgraded its PLL stock rating from equal weight to overweight and expects a price target of between $ 22 and $ 34.

Livet Corporation

The next stock on the list of the best lithium stocks in LTHM. Livent (LTHM) is the global lithium technology company that powers the things that drive people’s lives. Livent offers lithium products in a variety of sectors including polymers, energy and storage battery systems, and aerospace.

The company did pretty well in 2021. In the second quarter, Livet’s revenue increased 11% from the first quarter. While the change compared to the same quarter of the previous year is almost 57%. Operating income also improved from a loss in the year-ago quarter, which rose from a loss of $ 2.2 million to a profit of $ 4 million. This is mainly due to the increasing demand for lithium.

For the full year 2021, Livent expects revenues between $ 370 million and $ 390 million, compared to the previous guidance of $ 335 million to $ 365 million. The new outlook corresponds to annual growth of 28% to 35%.

LTHM stock outperformed most of its industry peers in 2021. The stock is so far up over 140%. EPS for the next year is expected to rise nearly 162.41%, which we think is quite possible given the way things are going. Returns are still negative with ROE and ROI of -1.80%. This will increase over time as the company expands and its revenues improve.

Livent has raised enough money to meet his short-term goals. Working capital has increased to $ 16.10 million in the past 12 months, compared to negative working capital in 2020 and 2019.

Citigroup has raised its rating for the LTHM share from neutral to buy and set a price target of between 25 and 28 US dollars. At the same time, Piper Sandler has an overweight rating with a price target of USD 29.

FMC Corporation

The final stock on the list of top lithium stocks is FMC. FMC Corporation (FMC) manufactures and sells crop protection products to promote feed health and pest control. The company uses lithium as a raw material in its manufacturing process and is one of the top lithium stocks. The company delivers its products across America, EMEA and Asia.

FMC’s goal is to achieve net zero greenhouse gas (GHG) emissions by 2035. The company will use science-based targets designed to keep the global temperature at 1.5 ° C above pre-industrial times. The company has committed to setting science-based goals as part of the Science Based Targets initiative. In line with the hype in the lithium industry and the US government’s zero emission plans, FMC stock will move higher.

FMC stock has pretty decent fundamentals. Quarterly revenue is up 7.50%, which will continue to improve in the coming quarters as FMC plans new initiatives. The stock is trading at its key support level over the 52 week period. That puts it in an upward position based on market realities.

Returns are also good with ROE and ROI of 18.20% and 12.10%, respectively. The institutional share is approx. 91.60%, which shows the confidence investors have in the FMC share. The average target price is USD 122.89. The analyst firm Mizuho has initiated a buy rating with a price target of USD 123.

In recent years, the need for environmentally friendly energy sources has become a must. The increasing demand for lithium will create a massive upward trend for lithium stocks going forward.

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