Top 5 US Lithium stocks to watch in 2022

Highlights

• Lithium is used in batteries of consumer electronics, smartphones, tablets, electric vehicles, etc.
• The metal’s extraction needs permission at various levels.
• With high electric vehicle demand, Lithium may remain in demand too in the years to come.

Lithium has seen a significantly increasing demand after the boost to the electric vehicle industry in recent years. However, Lithium is also used for various other purposes, including pharmaceutical use for treating depression and creating ceramics and glass, among others.

Now the demand for lithium has increased because of its presence in the batteries of smartphones, laptops, EVs, etc. The prices of Lithium have risen, driven by the need for rechargeable lithium batteries in devices.  

While the EV segment’s demand for batteries increased the most and is likely to increase in the coming years, the supply of lithium has not increased that much. The reason could be less investment in the projects or supply chain woes. To produce the metal, the companies have to take various permissions, and they often face environmental opposition too for extracting the metal. 

Chile and Australia are the highest lithium producers in the world. Analysts expect the demand to remain high in the next year before the production matches the demand in further years.

However, metal stocks cannot be ignored as they are the main component in the batteries on which things are running nowadays.

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Here we discuss five lithium stocks.

Lithium Americas Corp. (NYSE:LAC)

British Columbia, Canada-based Lithium Americas’ production assets are in Argentina and Nevada. Argentina has two brine resources, and Nevada has one clay resource. 

The company has a market capitalization of US$3.79 billion.  For the nine months ended September 30, 2021, it incurred a net loss of US$46.5 million compared to a net loss of US$25.6 million in the same period in 2020.

As of September 30, 2021, the company didn’t generate any significant revenue and relied mainly on equity and other financing operations.   Its stock price moved in the range of US$41.56 to US$8.95 in the last 52 weeks. The LAC stock closed at US$31.55 on December 13, 2021, with a 6.13% decrease.

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Albemarle Corporation (NYSE:ALB)

Albemarle Corporation is based in Charlotte, North Carolina. The company is engaged in lithium production. It has salt brine deposits in the US and Chile and hard rock mines via joint ventures in Australia. The company also produces bromine.

The company has a market capitalization of US$29.1 billion. Its P/E ratio is 131.64, and its forward one-year P/E ratio is 65.88. The dividend-paying Albermarle has a current yield of 0.59%.  

The company posted net sales of US$2.4 billion for the nine months ended September 30, 2021, compared to US$2.25 billion for the comparable period in 2020.

Its net income for the nine months in 2021 was US$127.5 million against US$291.1 million in the same period the previous year.  

ALB’s price moved in the range of US$291.48 to US$133.82 in the last 52 weeks and the stock closed at US$248.80 with a 5.35% decline on December 13, 2021.

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Livent Corporation (NYSE:LTHM)

Philadelphia, Pennsylvania-based Livent Corporation is a pure-play lithium company. The company produces low-cost lithium carbonate from its brine resources in Argentina and operates plants in the US and China for downstream lithium hydroxide conversion.  The company is focused on supplying high-performance lithium compounds to the electric vehicle market that is fast growing.

The company has a market capitalization of US$4.36 billion. Its P/E ratio is 182.47.  For the nine months ended September 30, 2021, the company earned revenue of US$297.5 million versus US$206 million in the similar period in 2020. The revenue increased in nine months, and the net loss decreased that came in at US$6.9 million compared to US$12.6 million in the previous year’s corresponding nine months. 

Its stock price moved in the range of US$33.04 to US$14.73 in the last 52 weeks and closed at US$27.02, down by 1.28% on December 13, 2021.

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Energizer Holdings, Inc. (NYSE:ENR)

Saint Louis, Missouri-based Energizer Holdings manufactures, markets, and distributes household batteries, lighting products and specialty batteries. It also offers auto care products in the categories such as performance, fragrance, and air conditioning recharge. 

The company has a market capitalization of US$2.6 billion. Its P/E ratio is 18.75, and its forward one-year P/E ratio is 12.15. Its dividend yield is 3.05% with an annualized dividend of US$1.20.  

For the fiscal year 2021 ended on September 30, the company posted net sales of US$3.02 billion compared to US$2.74 billion in the fiscal year 2020. Its net earnings to common shareholders were US$144.7 million for FY 2021 against the net loss of US$109.5 million in FY 2020 and net earnings of US$39.1 million in FY 2019.

The ENR stock traded in the range of US$52.85 to US$36.14 in the last 52 weeks and closed at US$39.00 on December 13, 2021, with a 0.96% decline.

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Source - pixabay

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Sociedad Quimica y Minera S.A. (NYSE:SQM)

The Santiago, Chile-based company is a commodity producer with a significant operation in lithium used for batteries in EVs. The other commodities produced are specialty potassium fertilizers, sola salts, and iodine.

The company has a market capitalization of US$15.9 billion. Its P/E ratio is 46.83, and its forward P/E ratio is 33.63. Sociedad’s dividend yield is 1.4%, and its annualized dividend is US$0.808%.  

For the first nine months of 2021, which ended on September 30, its revenues were US$1.79 billion compared to US$1.3 billion in the same period in 2020. It reported a net income of US$269 million compared to US$100 million in the nine months period in 2020. 

Its stock traded in the range of US$71.50 to US$40.53 in the last 52 weeks.  SQM stock closed at US$55.73, down by 3.1% on December 13, 2021.

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Bottom line:

The Global X Lithium & Battery Tech ETF was up nearly 33% YTD, representing growth in the segment. However, not all lithium stocks can replicate that performance. So, an investor must analyze the fundamentals as well as external factors before selecting any stock for investment.