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.
With global demand for lithium set to grow for the next several years, here are the best lithium stocks to buy in 2022.
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 5,000 employees in 100 countries and is one of the world’s largest lithium producers. It has lithium plants in Chile, Australia and China.
ALB posted strong results in its most recent quarterly report. Its quarterly sales topped $1.1 billion, and its adjusted EBITDA was 38.3%. The latter was an increase of 88% from just the previous quarter.
- Strong earnings growth
- One of the world’s largest lithium producers
- Global presence
- 2021 earnings were negative for some quarters
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 largest salt flat in Chile. It says it will have 180,000 metric tons of lithium production capacity in 2023.
SQM’s earnings also look strong, especially in Q1 2022. Its revenue topped $2 billion and its profit margin was just under 39.5%. SQM has earnings per share of well over $2 per share and it paid a dividend of over 10% in June 2022.
- Presence in Chile, which has the world’s largest known lithium reserves
- Strong earnings including consistent profitability
- Paid a dividend of more than 10% in June 2022
- Some concerns over potential environmental regulations the new Chilean president might pursue
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 Q1 2022, posting a net of negative $46.13 million. While some analyses consider it a strong 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
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 revenue, with a net negative income of $10.86 million in Q1 2022. However, analyst forecasts project a median 177% 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
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 net profit was more than 65% in each of the past two quarters, and better than 35% in the two quarters before. Its revenue topped $5 billion in Q1 2022. On its balance sheet, we see increasing revenue 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 37% profit in Q1 2022. Its earnings per share were just $0.28 in Q1, though that is up from $0.04 in Q4 2021. Its balance sheet shows minimal debt, but revenue fell in 2020 compared to 2019. Nevertheless, analysts consider it a buy with a bullish outlook.
- Has a supply agreement with Tesla
- Improving profitability and assets
- Almost all of its cash flow in 2021 was from financing
- Only recently became profitable
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 online broker, such as the Amplify Lithium & Battery Technology ETF (NYSE: BATT). This ETF includes stocks such as GNENF, SQM and ALB.
Information is accurate as of July 20, 2022.
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- Albemarle. 2022. "Albemarle Reports First Quarter Sales Growth of 36%, Raising Guidance."
- 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."