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White Gold; 3 Lithium Stocks for a Supercharged EV Industry

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With seemingly limitless growth potential, the EV market is undoubtedly one of the most fascinating and exciting stories to emerge in recent years.

And it goes without saying that investors have a massive opportunity to profit from the industry's growth trajectory over the next decade.

There are several ways investors can tap into the booming industry, such as by targeting stocks with lithium exposure.

Lithium is a non-ferrous metal, soft to the touch, and carries a white-silvery color. Most notably, it’s a critical component of EV batteries.

Of course, the metal has many other applications, with lithium-ion batteries present in many everyday items we use.

Due to its color and skyrocketing market value, many have coined it “white gold.”

For investors looking to add some lithium exposure to their portfolios, three highly-ranked stocks – Albemarle (ALB - Free Report) , Sociedad Quimica y Minera (SQM - Free Report) , and Livent (LTHM - Free Report) – would all provide precisely that.

Below is a chart illustrating the performance of all three stocks year-to-date, with the S&P 500 blended in as a benchmark.

Zacks Investment Research
Image Source: Zacks Investment Research

As we can see, all three stocks have soared in 2022, easily crushing the general market. Investors have undoubtedly recognized the value these companies bring.

Let’s take a deeper dive into each one.

Sociedad Quimica y Minera

Sociedad Quimica y Minera is one of the world's largest lithium producers, with one of the industry's least impactful water, carbon, and energy footprints. SQM sports a Zacks Rank #2 (Buy).

In its latest quarter (Q2 2022), SQM’s lithium operations raked in $1.8 billion, reflecting a sizable 28% sequential increase and an almost unbelievable 1030% Y/Y uptick from Q2 2021.

Year-over-year, Lithium sales volumes were up 41%, and prices grew 701%. Clearly, momentum has picked up.

Further, analysts have raised their earnings outlook significantly for the company’s current and next fiscal year.

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Image Source: Zacks Investment Research

Growth is more than apparent; earnings and revenue are forecasted to skyrocket by 530% and 260% Y/Y in FY22, respectively.

In addition to lithium exposure, the company also rewards its shareholders handsomely; SQM’s annual dividend yields a sizable 5.3%, notably higher than its Zacks Basic Materials Sector average.  

Even more impressive, the company has upped its dividend payout ten times over the last five years, paired with a 26% five-year annualized dividend growth rate.

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Image Source: Zacks Investment Research

Albemarle

Albemarle is a leading producer of highly-engineered specialty chemicals with three reportable segments: Lithium, Bromine, and Catalysts. ALB sports the highly-coveted Zacks Rank #1 (Strong Buy).

In Q2 2022, the company’s Lithium segment witnessed net sales grow a spectacular 178% Y/Y to $892 million, driven by favorable market pricing from contract renegotiations.

ALB also provided a favorable outlook for the segment – Lithium FY22 adj. EBITDA is expected to climb a triple-digit 500-550% year-over-year, up from its previous outlook.

Analysts have taken note, raising their earnings outlook substantially over the last several months.

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Image Source: Zacks Investment Research

Albemarle’s bottom-line growth is impossible to ignore; earnings are forecasted to soar 425% in FY22 and a further 23% in FY23.

Zacks Investment Research
Image Source: Zacks Investment Research

Livent

Livent is a fully-integrated lithium company manufacturing lithium for applications in batteries, agrochemicals, aerospace alloys, polymers, and various industrial applications. Livent sports a Zacks Rank #1 (Strong Buy).

In its latest quarter, the company raked in $219 million in revenue, penciling in a 52% sequential increase and an even larger 114% Y/Y uptick.

Further, the company stated that demand for lithium products has continued to substantially exceed supply, with the supply deficit expected to continue for the foreseeable future.

Unsurprisingly, LTHM’s bottom-line outlook has improved notably.

Zacks Investment Research
Image Source: Zacks Investment Research

Like ALB and SQM, Livent’s growth projections are stellar – earnings are forecasted to soar more than 650% in FY22 and a further 23% in FY23.

Further, the company’s quarterly results have already started to massively benefit from the surge in lithium demand, with LTHM exceeding the Zacks Consensus EPS Estimate by double-digit percentages in three consecutive quarters.

Bottom Line

Demand for lithium has skyrocketed as the world makes its EV shift.

And it goes without saying that demand won’t go anywhere anytime soon.

Still, the metal is critical for many other daily items as well, including power tools, appliances, and portable electronics, to name a few.

For those looking to tap into a supercharged lithium industry, all three stocks above – Albemarle (ALB - Free Report) , Sociedad Quimica y Minera (SQM - Free Report) , and Livent (LTHM - Free Report) – would all provide precisely that.

All three carry a strong Zacks Rank, telling us their near-term earnings outlook is visibly bright.


In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


Albemarle Corporation (ALB) - free report >>

Sociedad Quimica y Minera S.A. (SQM) - free report >>

Livent Corporation (LTHM) - free report >>

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