Demand for the raw element lithium has increased dramatically because of the increasing popularity of electric vehicles, as it happens to be a core element in creating the cars’ batteries. This has made the market attractive to investors, despite ups and downs. Regardless, the lithium business has not only seen a rise in demand but is expected to proliferate in the next few years. So, investors willing to be patient and get in now while it’s still early can certainly enjoy stable profits, especially in the long term.
All of the current indicators point to further growth in lithium mining equities over the next decade, and the appetite for the transition to electric vehicles shows no signs of dying off. In determining whether or not lithium is a suitable investment for you, it helps to be familiar with the market and who the prominent players are. For today’s list, my aim is to help out with that.
I’ve landed on three lithium equities offering promising long-term returns, and I’m anxious to pique your interest. I’ve accounted for business performance, of course, and the Street’s top analysts are also on board; buy and hold these time-sensitive tickers:
Livent Corp (LTHM)
Livent Corp. (LTHM) manufactures lithium compounds used in high-performance applications and does so on a global scale. LTHM’s lithium hydroxide, butyllithium, and pure lithium metal are used in electric vehicle batteries and other performance-related fields. LTHM was founded in 1942 in Philadelphia, PA, where its headquarters remain. Currently up YTD by 28.33%, LTHM has a market cap of $4.58 billion, a P/E ratio of 13.79x, a forward P/E of 11.59x, a PEG (price-earnings-growth) ratio of 0.42x, and a D/E (debt to equity) of 15.52%. With a TTM revenue of $923 million at $1.62, LTHM profited $335 million over the same period with a 36.30% net margin. Earnings-wise, LTHM most recently beat analysts’ EPS and revenue projections by 57.53% and 10.24%, respectively. LTHM shows YOY growth in critical areas such as revenue (+76.66%), net income (+45.79%), EPS (+96.43%), net profit margin (+22.17%), and operating income (+214.64%). LTHM has an operating free cash flow of $546 million and a 10-day average trading volume of 4.05 million shares. LTHM has a median price target of $31, with a high of $45 and a low of $23, representing the potential for a 76.50% price jump from its current status. LTHM gets 13 buy ratings and 7 hold ratings.
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Albemarle Corp (ALB)
Albemarle Corp. (ALB) develops, manufactures, and markets chemicals for purposes ranging from various consumer electronics to construction and medicine. ALB‘s robust lithium segment successfully produces lithium carbonate, chloride, and hydroxide. It also deals in bromine and hydro-processing catalysts for clean fuel. ALB was founded in Charlotte, NC, in 1993. Considered undervalued and down YTD by 10.31%, ALB has a $20.6 billion market cap and a $22.25 billion enterprise value. ALB shows a TTM revenue of $8.77 billion at an astounding EPS of 31.18 per share, from which it profited $3.68 billion via a 41.89% net margin, and it offers an ROE of 49.18%. ALB has a P/E ratio of 7.57x, a forward P/E of 6.57x, and a PEG ratio of 0.32x. Recently surpassing analysts’ EPS forecasts by 46.59%, ALB has an operating free cash flow of $2.42 billion. ALB has a dividend yield of 0.82% and a quarterly payout of 40 cents ($1.60/yr) per share. With a 10-day average volume of 2.9 million shares, ALB has a median price target of $255, with a high of $360 and a low of $360, suggesting a potential price upside of over 85%. Analysts have collectively marked ALB with 17 buy ratings and 9 hold ratings.
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Lithium Americas Corp (LAC)
Lithium Americas Inc. (LAC) is a resource corporation focusing on the development of lithium. Thacker Pass and Cauchar-Olaroz are two of LAC’s current initiatives. Vancouver, Canada, has been home to LAC‘s headquarters since it was founded on November 27th, 2007, by Raymond Edward Flood, Jr. General Motors (GM) recently invested $650 million in LAC to speed up the development of the Thacker Pass project, North America’s largest lithium mine to date. LAC has so much momentum right now that, although its stock is up YTD by 15.65%, it still sits near the bottom of its existing 52-week price range, leaving a positive outlook and growth potential. LAC has a market cap of $3.5 billion, a P/E ratio of 22.45x, a D/E (debt to equity) of 26.39%, and YOY (year-over-year) growth in EPS (+179.28%) and net income (+26.84%). With a 10-day average trading volume of 1.51 million shares, analysts have assigned LAC a median price target of $37, with a high of $42.50 and a low of $26. This leaves only room for upside; even the low mark would give LAC a nearly 19% price increase, while its high-end would take it to over 94%. Analysts have weighed in, and LAC boasts an uncontested 14 buy ratings.
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