6 Best Lithium Stocks To Buy in 2022
Lithium is an essential part of powering our technology, including cellphones, laptops and electric vehicles. All of this technology uses lithium-ion batteries, which means the demand for lithium will remain high for years to come.
Smartphones, tablets and laptops are already ubiquitous. But the demand for EVs is growing quickly as many countries work to phase out sales of gas-powered cars. For instance, EV sales doubled in 2021 to 6.6 million, according to a report from the International Energy Agency.
According to the report, there are more electric vehicles “now sold each week than in the whole of 2012.” Due to this rapid increase in demand for lithium, a McKinsey & Company report suggests lithium needs will grow 25% to 26% per year until 2030.
What Are the Best Lithium Stocks To Buy?
With global demand for lithium set to grow for the next several years, here are the best lithium stocks to buy in 2022:
- Sociedad Química y Minera de Chile
- Lithium Americas
- Piedmont Lithium
- Ganfeng Lithium
Albemarle (NYSE: ALB) is a specialty chemicals manufacturing company based in Charlotte, North Carolina. It has three specialty chemical divisions, the largest of which is lithium, accounting for 41% of its revenue in 2021. Albemarle has over 5,500 employees in 100 countries and is one of the world’s largest lithium producers. It has lithium plants in Australia, Chile, China, Germany, India, Taiwan and the U.S.
ALB posted strong results in its most recent quarterly report. Its quarterly sales topped $1.4 billion, and its adjusted EBITDA was up 353% year over year.
- Strong earnings growth
- One of the world’s largest lithium producers
- Global presence
- 2021 earnings were negative for some quarters
2. Sociedad Química y Minera de Chile
Sociedad Química y Minera de Chile (NYSE: SQM) is a chemical company based in Chile. Its products include plant nutrients, lithium, iodine, potassium and industrial chemicals. SQM is one of the world’s leading producers of lithium, with a presence on five continents. That includes a presence in Chile’s Salar de Atacama, the country’s largest salt flat. The company says it will have 180,000 metric tons of lithium production capacity in 2023.
SQM’s earnings also look strong, especially in Q2 2022, the most recent quarter for which the company has released earnings. Its revenue topped $2.5 billion and its profit margin was over 32.73%. SQM has diluted earnings per share of $3.01, and its dividend yield is 12.48%.
- Presence in Chile, which has the world’s largest known lithium reserves
- Strong earnings including consistent profitability
- Pays a dividend yield of 12.48%
- Some concerns over potential environmental regulations the new Chilean president might pursue
3. Lithium Americas
Lithium Americas (NYSE: LAC) is a lithium mining company focused on advancing lithium projects in Argentina and the United States. These operations focus on Caucharí-Olaroz in Argentina and Thacker Pass in Nevada. Thacker Pass has the largest known lithium reserves in the U.S., with a value that LAC estimates at about $2.6 billion.
However, these projects are both still in development; the result is that LAC is currently operating at a loss. Its net income was down significantly in Q2 2022, posting a net of negative $16.56 million, down from $46.13 million in Q1. While some analysts consider it a buy with a lot of upside potential, this stock is more speculative in nature.
- Presence in two mines, including the largest known lithium mine in the U.S.
- Strong upside potential for its stock if its projects go according to plan
- Not yet earning revenue
4. Piedmont Lithium
Piedmont Lithium (Nasdaq: PLL) is a lithium company based in the Charlotte, North Carolina, area. The company has a lithium hydroxide plant in North Carolina that it says will “serve the important vehicle and stationary storage markets in the USA and Europe.”
It looks to provide an alternate source of lithium hydroxide, 80% of which currently comes from China, according to Keith D. Phillips, the company’s president and CEO. The company notably signed a deal to supply lithium to Tesla, although it was later delayed.
PLL is in the development phase, like LAC. Hence, it is also not reporting any profits, with a negative net income of $9.58 million in Q4 of its 2022 fiscal year. However, analyst forecasts project a median 76% 12-month increase in its share price. Of course, this assumes all goes well with its current project.
- U.S.-based production that aims to shrink China’s 80% market share
- Signed a deal with Tesla to supply lithium to the EV maker
- Project still under development
- Some have voiced concerns to environmental regulators over the company’s mine
5. Ganfeng Lithium
Ganfeng Lithium (OTC: GNENF) is China’s largest lithium producer and the third largest in the world. It has mineral resources in Australia, Argentina, Mexico and China. Ganfeng is involved throughout the supply chain, from lithium resource development to recycling. It provides lithium and lithium compounds for use in vehicles, energy storage and consumer devices. The company has a sustainability focus, providing materials for clean energy and creating a circular development cycle.
Ganfeng’s earnings report shows positive signs for investors. Its profit grew nearly 6% from Q1 2022 to Q2, the last quarter for which it has announced earnings. Revenue topped $9 billion in Q2 2022, a 269.42% increase year over year. On its balance sheet, we see increasing capital and assets, and the company doesn’t have much debt. Overall, it appears to be one of the best lithium stocks to invest in.
- Third-largest lithium producer
- Healthy profit margins
- Sustainability focus
- No operations in Chile, the largest source of lithium reserves
Livent Corp. (NYSE: LTHM) is a fully integrated lithium company based in Philadelphia. Its products are used primarily in lithium-based batteries, specialty polymers and chemical synthesis applications. Its focus is on supplying lithium for EVs and for other uses. Livent produces lithium primarily in Argentina.
Livent has posted strong earnings recently, with a 27.43% profit in Q2 2022. Its earnings per share were just $0.31 in Q2, though that is up from $0.28 in Q1 and $0.04 in Q4 2021. Its balance sheet shows minimal debt, but revenue fell in 2020 compared to 2019. Nevertheless, analysts consider LTHM undervalued; they rate it a buy with a one-year target of $33.14. The stock closed at $28.66 on Oct. 18.
- Has supply agreements with Tesla and GM
- Improving profitability and assets
- Almost all of its cash flow in 2021 was from financing
- Only recently became profitable
How To Buy Lithium Stocks
You can buy lithium stocks by investing in companies that are directly involved in lithium mining and refinement, or you can invest indirectly by buying stock in companies that support the lithium industry — battery makers and other energy-storage firms, for example.
Websites like Yahoo Finance and Morningstar and most major news sites publish stock quotes and company information you can use to research stocks you might want to invest in. When you’re ready to buy, log in to your brokerage account. If you don’t already have one, consider using one of the firms that made GOBankingRates’ list of the best trading sites for beginners.
You can start trading as soon as your account is set up and funded. Just search the stock you want, click the “buy” button or link and enter the number of shares you want to purchase — or the dollar amount you want to spend on a fractional share — and submit the order.
Are There ETFs for Lithium Stocks?
ETFs, or exchange-traded funds, are investment funds that focus on a particular investment theme or type of company. They pool funds from many investors like mutual funds do, but they’re typically less expensive, and your buy and sell orders are executed immediately when you place them while the market is open.
A few companies offer lithium stock ETFs:
- Amplify Lithium & Battery Technology ETF (BATT): BATT invests in companies that generate significant revenue from the development, production and use of lithium battery technology.
- Global X Lithium & Battery Tech ETF (LIT): LIT invests in companies across the lithium cycle, from mining to refinement and battery production. Albemarle is its top holding.
- ARK Autonomous Technology & Robotics ETF (ARKQ): ARKQ isn’t a lithium ETF, per se, but it does invest in related companies, such as those involved in autonomous technologies and energy storage.
Lithium stocks represent one of the most interesting opportunities for investors today. Some of the companies on this list are still working on getting their operations up and running, which shows just how early it is in the business of lithium. Hence, things are still speculative, and the real winners and losers have yet to be determined.
Still, investing in lithium stocks isn’t complicated. You can search any of the stock tickers mentioned in this article on an online brokerage and add them to your portfolio. Or you can buy a lithium ETF through your broker.
Daria Uhlig contributed to the reporting for this article.
Information is accurate as of Oct. 19, 2022.
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- Bloomberg. 2022. "This 36-Year-Old Is Leading Latin America to a Green Revolution."
- McKinsey & Company. 2022. "Lithium mining: How new production technologies could fuel the global EV revolution."
- Reuters. 2021. "Piedmont Lithium delays timeline to supply Tesla."
- Reuters. 2022. "China's Ganfeng Lithium to buy Lithea Inc for $962 million."
- International Energy Agency. 2022. "Global electric car sales have continued their strong growth in 2022 after breaking records last year."