Investing in the best lithium stocks could be an excellent long-term opportunity for investors. Lithium is becoming increasingly important in green energy.
Currently, there is more demand for lithium than supply, and the trend is unlikely to reverse soon. To keep up with the soaring demand, every existing producer must double output every two to three years during the next decade.
The green energy revolution has been hard on the limited lithium supply, as the industry has experienced a seismic shock in demand. Many companies invested in the rush to excavate lithium needed to prepare for such an influx of market pressure and have struggled to keep pace with it.
As a result, standard lithium reserves are now down to systemically low levels as they haven’t had the opportunity to build up their reserves in anticipation of the heavy demand. Therefore, lithium prices should remain elevated or the foreseeable future. Having said that, lets look at seven of the best lithium stock to wager on at this time.
| LAC | Lithium Americas | $22.85 |
| LIT | Global X Lithium & Battery Tech ETF | $63.74 |
| ALB | Albemarle | $242.86 |
| SGML | Sigma Lithium | $29.83 |
| GNENF | Ganfeng Lithium Group | $8.31 |
| SQM | Sociedad Quimica y Minera | $85.25 |
| SLI | Standard Lithium | $3.49 |
Lithium Americas (LAC)
Investors are upbeat over Lithium Americas (NYSE:LAC) prospects due to its 100% interest in the much-talked-about Thacker Pass project in Nevada.
Boasting the world’s second-largest proven and probable lithium reserves, this dynamic mine offers 179 megatonnes of lithium and 3.1 megatonnes in lithium carbonate equivalent. It is right on the brink of production and longevity of 46 years, making it an incredible resource for the firm.
Thacker Pass is set to become a powerhouse in the U.S. lithium supply chain, and its potential is clear, with reliable product samples already produced at the site.
Lithium Americas’ Argentina operations should not be overlooked, though, as they should come online soon and could produce up to 40,000 tonnes of LCE. These combined lithium efforts paint a rosy picture for Lithium America’s future as it looks to position itself well in the current marketplace.
Global X Lithium & Battery Tech ETF (LIT)
Investors can gain exposure to some of the most popular sectors at a lower cost and risk by investing in exchange-traded funds.
Global X Lithium & Battery Tech ETF (NYSEARCA:LIT) is among the top ETFs in its niche, providing exposure to some of the biggest names in the EV and lithium industries.
Some of the top holdings in the ETF include EV stalwarts Tesla and BYD, along with high-risk, high-reward plays such as Quantumscape. LIT handles over $4 million in assets with an attractive expense ratio of 0.75%. Hence, the ETF is worth considering if you want to gain exposure to the burgeoning lithium market.
Albemarle (ALB)
With its promising upside and modest dividend, Albemarle (NYSE:ALB) should be a priority for any investor looking to capitalize on the U.S. lithium supply chain.
Despite being an industry stalwart, Albemarle still offers opportunities for big returns due to its strong competitive position and focused strategy for lithium and bromine derivatives. With a sound risk management system, Albemarle is well-positioned to take full advantage of ongoing shifts throughout the domestic lithium market, providing investors with consistent value going forward.
Albemarle has had an incredible year and is showing no signs of slowing down. In the third quarter, the company’s revenues increased by a whopping 152%, reaching $2.1 billion.
Moreover, EBITDA took an even greater leap of 447% to $1.2 billion. Also, ALB stock sports an attractive dividend yield of 0.61%. For investors looking for stability with a steadier upside than some of the newer or lesser-known shares on the market, Albemarle is an excellent choice.
Sigma Lithium (SGML)
Sigma Lithium (NASDAQ:SGML) offers healthy upside potential for its investors with its bold move to ramp up lithium production.
With the construction of its Groat do Cirilo mine, Sigma Lithium has the potential to place itself among the top lithium producers thanks to its access to one of the largest and highest-grade deposits globally. Consequently, this could mean excellent financial gains for its shareholders down the road.
Sigma Lithium aims to produce 100,000 tonnes of LCE by 2024. If it can achieve its targets, it will make it the top four lithium producers in the world. To back this up, their surveys reveal that their mineral resources amount to 984,000 tonnes of LCE, ensuring stability and predictability of their operations over a sustained period.
Ganfeng Lithium Group (GNENF)
Ganfeng Lithium Group (OTCMKTS:GNENF) may be the world’s largest lithium metal producer while trading as a newcomer.
It’s the leading lithium miner in China and is positioned incredibly well to benefit from incredible growth in the Chinese EV market. With its current size and future growth prospects, GNENF stock is an excellent option for those looking for a potentially lucrative investment opportunity.
The company reported a supply capacity of over 100,000 tonnes of LCE this year, but by 2030 expects to produce 600,000 tonnes of LCE from its various plants across China.
This success is highly beneficial for Ganfeng and its investors alike, but it’s also great news for the entire global market that relies on lithium and other similar materials. Nevertheless, GNENF stock trades at under $10, with analysts expecting over 50% upside from current levels.
Sociedad Quimica y Minera (SQM)
Sociedad Quimica y Minera (NYSE:SQM) is a unique opportunity for investors looking to diversify their portfolios.
The firm has a long history of creating significant value by producing a wide range of chemical and mineral products. Moreover, it boasts an impressive track record of withstanding fluctuating demand with consistent financial performance.
SQM stock has generated over a 60% return year-to-date in a highly sluggish equity market. Therefore, investing in SQM today will allow you to capitalize on long-term growth opportunities while also taking a defensive stance against an unpredictable market.
During the first nine months of 2022, its lithium revenues totaled $5.6 billion, representing an eye-catching 1064% increase on a year-over-year basis. SQM has benefitted from robust lithium prices and proven to be an especially lucrative business over the years, with more than a 70% return on invested capital over the past five years.
Standard Lithium (SLI)
Standard Lithium (NYSEAMERICAN:SLI) stock is an exciting long-term investment opportunity that holds the potential for healthy returns in the future.
SLI recently awarded design and feasibility projects for its first commercial lithium plant during the quarter. These projects won’t be online until sometime in the first half of 2023, so investors must be patient.
The company’s novel method of lithium extraction from brine gives it an edge over its competition. If their projects prove successful, they will revolutionize the field, reducing the extraction process from months to hours.
With this technology entering the market, SLI’s demand could skyrocket. Moreover, the firm has taken a step in the right direction by filing patents for its processes, implying a serious commitment to its endeavors and adding assurance to investors that they can count on continued success.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines
