Top lithium stocks to explore in April: ALB, LTHM, LAC, SQM & PLL

Higher Lithium prices may reduce EV demand and constrain company profits, economists warned. They say EV battery costs may jump by 25% due to higher Lithium prices. 

Lithium is a basic metal used in battery manufacturing. It is in huge demand from EV makers. Lithium carbonate prices have risen due to lower material supply and refining capacity.

The Biden administration’s Infrastructure and Jobs Act has allocated US$5 billion for building EV charging stations to achieve the target of making EVs around 50% of new auto sales in the US by 2030. The government’s EV push has increased the demand for lithium. But Lithium supply constraints have dogged the industry.

The following are five Lithium stocks worth exploring. 

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Albemarle Corporation (NYSE: ALB)

Price range in one year: US$291.48 to US$141.94
Closing price on March 23, 2022: US$214.15

Albemarle Corporation is of one the largest lithium producers in the world. It is based in Charlotte, North Carolina. It produces lithium from the salt brine deposits in the US and Chile. The company also produces bromine.

Its revenue was US$3.32 billion for the fiscal year 2021 compared to US$3.12 billion in FY 2020. The net income attributable to the company came in at US$123.7 million or US$1.06 per share diluted in fiscal 2021 versus US$375.8 million or US$3.52 per diluted share in fiscal 2020.

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Its market capitalization is US$25.09 billion. ALB has a P/E ratio of 200.27 and a dividend yield of 0.76%, with an annualized dividend of US$1.58.

It was up 0.49% to US$215.2 at 1:48 pm ET Friday.

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Source: pixabay

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

Price range in one year: US$84.07 to US$40.53
Closing price on March 23, 2022: US$83.83

Santiago, Chile-based Sociedad Quimica is a commodity producer with a significant operation in lithium, which is primarily used for EVs batteries and energy storage systems. It also produces specialty potassium fertilizers, sola salts, and iodine.

For the year ended December 31, 2021, its net income was US$585.5 million compared to the net income of US$164.5 million for fiscal 2020.

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The revenue was US$2.86 billion for the Fiscal year 2021, and the earnings per share diluted were US$2.05 compared to US$0.63 in the twelve months of 2020.

Its market capitalization is US$23.9 billion. SQM has a P/E ratio of 40.43 and a dividend yield of 4.57%, with an annualized dividend of US$3.658.

SQM stock traded up 0.02% to 83.86 at 1:49 pm ET on Friday.

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Piedmont Lithium Inc. (NASDAQ: PLL)

Price range in one year: US$79.50 to US$40.65
Closing price on March 23, 2022: US$74.43

Belmont, Australia-based Piedmont Lithium is focused on developing Lithium projects in the Carolina TinSpodumene Belt, Hallman Beam, and Kings Mountain mines.

In February this year, it released its development plans and estimated production of 30,000 tons of lithium hydroxide per year. The company plans to expand US lithium hydroxide manufacturing capacity to 60,000 tons annually. It also announced the completion of a preliminary economic assessment for its second lithium hydroxide plant in the US on March 9.

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On March 24, the company announced the closing of its underwritten public offering of 2.01 million shares of common stock. The aggregate gross proceeds from the public offering amounted to US$130.8 million before deducting underwriting discounts and commissions.

The company reported a net loss of US$10.86 million for the three months ended September 30, 2021, compared to the net loss of US$1.88 million for the same period in 2020.

Its market capitalization is US$1.19 billion. 

The stock was up 0.48% to US$74.79 at 1:49 pm ET on March 25.

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Lithium Americas Corp. (NYSE: LAC)

Price range in one year: US$41.56 to US$11.84
Closing price on March 23, 2022: US$34.8

Lithium Americas has three lithium production assets: two in Argentina and one clay resource project in Nevada. The company is located in Canada.

For the year ended December 31, 2021, the company did not earn any revenue, and the net loss was US$38.5 million compared to a net loss of US$36.2 million in fiscal 2020. 

It had US$511 million in cash and cash equivalents as of December 31, 2021. Lithium's market capitalization is US$4.6 million. The stock fell 1.16% to US$34.39 at 1:49 pm ET on Friday, March 25.

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Livent Corporation (NYSE: LTHM)

Price range in one year: US$33.04 to US$15.48
Closing price on March 23, 2022: US$25.71

Philadelphia, Pennsylvania-based Livent Corporation is a pure-play lithium company that produces low-cost lithium carbonate. The company is focused on supplying high-performance lithium compounds to the EV market.

For the year ended December 31, 2021, its revenue was US$420.4 million, a 46% increase compared to US$288.2 million in fiscal 2020. The GAAP net income was US$0.6 million, compared to a net loss of US$16.3 million in FY 2020.

Its market capitalization is US$4.12 billion. LTHM has a forward P/E for one year of 42.15.

Its stock fell 1.05% to US$25.44 at 1:49 pm ET on Friday.

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Bottomline 

Though lithium is in high demand, companies are not able to meet the orders. Higher lithium prices may increase the cost of related products like EV batteries. Against this backdrop, Lithium stocks are likely to see significant traction. However, investors must exercise due diligence before investing in the stock market.