According to Allied Market Research, the global Lithium-ion battery market was valued $36.7 billion in 2019 and is projected to hit $129.3 billion by 2027, at a CAGR of 18.0% from 2020 to 2027. At the end of the fourth quarter of last year, 4 hedge funds held stocks in PPL and the shares have rallied more than 600% over the last 12 months alone. Ranking 11th in our list of 11 best lithium stocks to buy now is Piedmont Lithium Limited. Lithium is one of the most in-demand commodities across the globe given its immense use and benefits, especially in the battery market. According to a report by Deloitte, analysts have a consensus that the demand for lithium will double or even triple by 2030. The same report said that the EV market is set to grow exponentially over the next two decades, fueled by a global push to achieve net-zero carbon emissions and cost-effectiveness of electric cars.
But investing in a lithium stock-heavy exchange-traded fund, or ETF, can give your portfolio exposure to lithium with less risk. Lithium ETFs include a basket of stocks related to the lithium https://1investing.in/ industry. One of these ETFs is the Global X Lithium & Battery Tech ETF (LIT). LIT invests in companies that span the lithium production cycle, such as mining, refining and battery production.
EV battery stocks for lithium exposure
The lithium mining company got a boost after the Biden administration’s push for EVs. Sigma Lithium (SGML, $34.23) is a Canadian company with its operations located in Brazil. It has four mineral properties, including Grota do Cirilo, Sao Jose, Santa Clara and Genipapo. Two of the five analysts surveyed by TipRanks categorize SQM stock as a Buy.
The company offers a 1.85% dividend yield and has expressed commitment to expanding its operations. There are currently 34 hedge funds investing in Johnson Controls Inc. which is much higher compared to the 24 hedge funds of the third quarter of last year. Livent is currently producing qualified battery-grade lithium hydroxide in the United States (capacity being nearly 10,000 tons) and China (roughly 15,000 tons). Livent remains on track with near-term capacity expansions and a 5,000 metric ton hydroxide addition in Bessemer City. The acquisition of 25% indirect equity ownership in the Québec-based Nemaska Lithium project is also set to aid top-line growth.
Moreover, the company expects to move forward with its $1.3 billion investment plan in 2024. The goal is to take its lithium carbonate capacity to 120,000 tons by the end of this year. Additionally, the company will also be increasing its hydroxide capacity to 21,500 metric tons. Therefore, the company’s resilience is likely to pay dividends as its lithium supply picks up. Despite the challenges presented by the pandemic, the large lithium producer has weathered the storm convincingly. For instance, the company’s earnings results have been impressive, with strong operating cash flow growth.
Piedmont Lithium Inc. (NASDAQ:PLL)
As such, ENR stock is one of the strongest, low-risk lithium stocks currently on the market. SQM predicts demand for lithium will outpace supply over the long term, so it has been investing to increase its production capacity. With recent improvements now complete, the company thinks it will be able to increase its market share in supplying lithium, mainly for EV batteries. Although lithium prices can be volatile, Albemarle has proven itself over the years to be a durable mining operation with the ability to bring lithium to market. It has minimal long-term debt and plenty of cash to fund new projects, and it generates consistent operating profit margins in the low- to mid-teens.
One of South America’s top basic materials and chemical companies, Sociedad Quimica y Minera (SQM) is one of the world’s largest producers of lithium used in batteries and other energy storage technologies. The South American country’s president recently announced intention to nationalize the lithium industry with a state-owned company. This would affect the financial results for companies that operate in Chile, as well as any company with plans to develop lithium mining there. Chile’s National Congress would need to sign off on the plan before it proceeds. Once these projects are operational, Lithium Americas will have an annual EBITDA potential of $800 million.
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This project is looking at expanding the U.S. supply of lithium hydroxide by 30,000 metric tons per year. SQM expects to have this production capacity up and running by 2025. As EV companies took off around the world, lithium saw a boom in price.
LAC’s South American brine operation secured sufficient funding to bring the project to commercial production (financial de-risking). These developments allowed us to lower the discount rate used on future cash flows to reflect where LAC sits in their development cycle. LAC is also one year closer to production, which means cash flows are accretive to the firm sooner. There were 12 hedge funds that held positions in LAC by the end of December, compared to 3 funds in the third quarter.
On February 10, the company announced a quarterly cash dividend of $0.175 per share of common stock to holders as of March 12, 2021. In this article, we will take a look at the 11 best lithium stocks to buy now. You can skip our detailed discussion of the lithium market, its outlook and the role it is playing in the EV revolution and go to 5 Best Lithium Stocks to Buy Now. The analyst has a Buy rating with a price target of $40 on the stock, implying an upside potential of 16.9% at current levels.
Are lithium stocks a good investment?
Faisal Humayun is a senior research analyst with 12 years of industry experience in the field of credit research, equity research and financial modelling. Faisal has authored over 1,500 stock specific articles with focus on the technology, energy and commodities sector. Livent is a leading vertically integrated pure-play producer of low-cost lithium. The company is a seller to electric vehicle OEMs and battery manufacturers globally. Overall, the lithium, bromine and catalyst business segments reported adjusted EBITDA of $863 million for the third quarter.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. Sociedad Química y Minera de Chile is a Chilean commodity play with a prime focus on lithium and potassium. Similar to its peers, it had a rough last year, but things are moving in the right direction off-late amidst the improving industry outlook. Additionally, it expects its performance for the full year to be at the higher end of its guidance ranges. Also, Livent announced several new sustainability goals to achieve carbon neutrality by 2040.
Lithium batteries require 0.15 kg to 0.3 kg of lithium per kWh making it only one-third the weight of lead-acid batteries. Lithium batteries are also used in smartphones, smartwatches, and other portable smart devices. According to a report by Statista, the demand for lithium-ion batteries soared 536-gigawatt hours in 2020 and is expected to increase to 9,300 gigawatt-hours in 2030.
Albemarle Corp is among the largest and most prominent lithium stocks. The company is one of the leading lithium miners, with a market value on par with other leading commodities names like Barrick Gold Corporation (GOLD). Like many companies, Orocobre had a tough time during the pandemic. However, its most recent quarterly results suggest that things are normalizing again.
Chris Markoch is a freelance financial copywriter who has been covering the market for over five years. Volatility profiles based on trailing-three-year calculations of the standard deviation of service investment returns. Quantum glass battery companies may make a rocky road much smoother. The company is well-capitalized with cash and manageable indebtedness, and it has generated healthy profit margins. Albemarle recently made the news with a bid to acquire small Australian pre-production lithium miner Liontown Resources (LINR.F -1.56%).
- Chris Markoch is a freelance financial copywriter who has been covering the market for over five years.
- Furthermore, they have initiated a drilling program at their southwest Arkansas lithium project aimed at gathering vital data for feasibility studies, a crucial step for any large-scale project.
- Lithium prices have been weak in 2023, and ALB stock has been volatile as a result.
- By the end of the year 2020 alone, the company reported a net income of $84.6 million.
- They have also announced a 29% increase in dividends to shareholders, demonstrating confidence in the company’s future.
Second, it means that the potential returns on these investments are very high as well. The share prices will most likely rise in time, so you have the added protection of a rising stock price. According to an SEC filing from December, 2020, the company received a permit for a 22,700 tons rent due to landlord journal entry per year lithium hydroxide plant at Kings Mountain, North Carolina. This company, which went public all the way back in 1993, is trading at its best levels in two years. It’s expanding its production capacities, which should result in a sales increase later this year and into 2022.
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Despite a tough 2020, it has some interesting growth prospects in its lithium operations reflected in its most recent earnings. The company expects lithium demand to rise at a healthy rate in the coming years. President Joe Biden and his administration have been pushing forward aggressively with their EV expansion plans in the country. Lithium batteries are used to power EVs, so lithium stocks are likely to be more profitable investments as we advance. Moreover, lithium prices can come under pressure in the short term.
- The company is due to report quarterly results on March 3, with analysts eyeing earnings of 25 cents per share, on par with the year earlier quarter.
- In this article, we discuss the 10 best lithium and phosphate stocks to buy now.
- Analysts expect a massive improvement in revenue growth moving forward, with estimates that are well ahead of the sector average.
- Livent Corp. signed an agreement with Tesla to increase the volume of its supply in 2021 and analysts expect the partnership to extend through 2022.
Both of these are lending support to the idea that Tesla could decide to make a strategic acquisition that would supercharge its battery production plant. But even if Tesla doesn’t become a partner, there should be ample room in the EV market to accommodate many lithium producers. Shares of this specialty chemicals giant are up more than 65% in the past year. From a financial point of view, despite a drop in profits and revenues during the first half of 2023, they remain a stable force in the lithium market. In particular, they have contributed approximately $1.7 billion to the Chilean treasury during this period, illustrating their economic importance. The potential discovery centers around the McDermitt Caldera on the border of Nevada and Oregon.