A number of us, myself included, typically associate precious metals with gold, silver, or platinum. However, the most valuable metals right now are those in great demand for technology manufacturing in what’s becoming a rapidly evolving digital society. Lithium happens to be the most relevant of the bunch. And this is critical in bringing us toward a future in which green energy is the norm.
For the next big energy investment, an increasing number of investors are looking at lithium stocks. Lithium is in greater demand than it has ever been. And its prominence and vitality are only going to rise as the sustainable energy movement continues to favor lithium batteries and fuel cells. Today’s investment in lithium equities might pave the way for huge returns a few years down the road.
Let’s look at three lithium stocks I’ve chosen to highlight due to market resilience and their popularity among analysts. These tickers are considered to be innovative portfolio picks:
Albemarle Corp (ALB)
Albemarle Corp (ALB) is a U.S.-based specialty chemicals manufacturer. Lithium, bromine specialty, and catalysts are its three segments. ALB was the top supplier of lithium for electric car batteries as of 2020. ALB is a major producer of flame retardant chemicals, having facilities in the U.S., China, the Netherlands, Belgium, Germany, France, Austria, and the U.K. ALB also has a range of antioxidants and blends to extend the life and stability of gasoline and lubricant products in storage. The firm was established in 1993 and is based in Charlotte, North Carolina.
Lithium accounts for about 36.6% of ALB‘s revenue as of now, but that number is only expected to grow. For its current quarter, ALB shows $1.4 billion in sales, at an EPS of $2.90. On its last earnings call, it crushed analysts’ projections on EPS and revenue by 44.31% and 9.34%, respectively. Its year-over-year growth is healthy, with revenue growth of 35.99% and diluted EPS growth of 155.95%. ALB currently has a dividend yield of 0.61%, with a 39 cents per share quarterly payout. The consensus price objective for ALB from analysts that provide 12-month predictions is 286.00, with a high of 368.00 and a low of 135.00. The estimate implies an increase of 11.12%, and analysts give ALB a strong buy rating.
FMC Corp (FMC)
FMC Corp (FMC) is a chemical manufacturing corporation that began as an insecticide manufacturer in 1883 and has since expanded into other fields. This includes, for example, lithium production. Cheminova was purchased by the firm in 2014. This significantly boosted the company’s developing lithium technology portfolio. In 2018, the firm split off the majority of its lithium business into Livent (LTHM). FMC still has an 84% controlling interest in the company, making it a terrific behind-the-scenes lithium bet.
FMC’s company Livent (LTHM) has shown robust financials, most notably its year-over-year numbers. LTHM shows revenue growth of 56.49%, EPS growth of 2900%, and net profit margin growth of 4360.92%. FMC’s LTHM most recently beat EPS forecasts by 52.18% and revenue expectations by 2.56%. On its own, FMC comfortably shows current fiscal quarter numbers of $1.3 billion in sales, at $1.89 per share. At the moment, FMC has a dividend yield of 1.76%, with a quarterly payout of 53 cents per share. The consensus price target for FMC from analysts that provide 12-month predictions is 145.00, with a high of 155.00 and a low of 109.00. The consensus projection reflects a 20.37% rise from current pricing, and FMC’s buy rating shouldn’t be overlooked.
Sociedad Quimica y Minera de Chile (SQM)
Fun fact: Over half of the world’s lithium and lithium storage products are produced by three corporations: Albermarle (ALB, my 1st pick), FMC Corp (FMC, my 2nd pick), and now my 3rd pick, Sociedad Qumica y Minera de Chile (SQM). This is a happy coincidence but also serves to emphasize the strength of these stocks and my confidence in recommending them. Also notable is that SQM is the world’s largest producer of lithium. The Chilean chemical business SQM also provides plant fertilizers, iodine, and various industrial chemicals. The Atacama Desert is home to SQM‘s natural resources and facilities.
SQM shows robust financials, which largely contributes to its success. For its most recent earnings report, it exceeded sales forecasts by 36.62%, and it went off the charts to beat EPS projections. Like its peers on this list, SQM has great year-over-year numbers: revenue – 282.2%, diluted EPS – 973.08%, net profit margin – 206.53%. SQM’s current quarter shows us $2.1 billion in sales, at $2.25 per share. Currently, SQM has an annual dividend yield of 3.15%, with a quarterly payout of 80 cents per share. The consensus price objective for SQM from analysts that provide 12-month price projections is 103.00, with a high of 136.00 and a low of 57.66. The median estimate implies an increase of 0.91% from its previous price, and SQM has earned a large consensus behind its buy rating.
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