The lithium story is only set to accelerate. For the world to meet its climate goals and put millions of electric vehicles on the roads, we need as much lithium as we can get our hands on. General Motors (NYSE:GM) is well aware of that, investing $650 million in Lithium Americas to secure lithium supply. “Automakers are starting to realize that the only way to guarantee lithium supplies is to own or have a controlling stake in the source,” says CNBC.
In addition, global demand for lithium batteries is expected to jump five-fold by 2030, according to Li-Bridge. “Demand for lithium batteries in the United States is expected to grow more than six times and translate into $55 billion per year by the end of the decade,” as quoted by Reuters.
With that said, here are some of the top ways to invest in lithium right now.
A person drawing a line graph with the phrase "ETF" in large letters on a chalkboard. index funds to buy
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As I’ve often said, the best way to diversify at low cost is with an exchange traded fund (ETF), such as the Amplify Lithium & Battery Technology ETF (NYSEARCA:BATT). With an expense ratio of 0.59%, the BATT ETF provides exposure to global companies deriving material revenue associated with developing, producing, and using lithium battery technology.
Some of its top holdings include Tesla (NASDAQ:TSLA), LG Chemical, Albemarle (NYSE:ALB), Sociedad Quimica y Minera (NYSE:SQM), Panasonic (OTCMKTS:PCRFY), BHP Group (NYSE:BHP), and BYD Company (OTCMKTS:BYDDF), to name a few.
Global X Lithium & Battery Tech ETF (LIT)
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The Global X Lithium & Battery Tech ETF (NYSEARCA:LIT) is also available. With an expense ratio of 0.75%, the LIT ETF invests in the complete lithium cycle, from mining and refining the metal, through battery production. Some of its top holdings include Albemarle, TDK Corp. (OTCMKTS:TTDKY), Panasonic, BYD Co., Tesla, Livent Corp (NYSE:LTHM), Piedmont Lithium (NASDAQ:PLL), and Standard Lithium (NYSEMKT:SLI), to name a few.
Albemarle (ALB)
Albemarle (ALB) logo on a mobile phone screen
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One of the top “no-brainer” lithium picks is Albermarle, which is already benefiting from a massive spike in demand. In its earnings, the company posted a net income of $1.13 billion, or $9.60 per share, compared to a loss of $3.8 million, or 3 cents per share, year over year. These results were all thanks to a five-fold jump in lithium sales. For 2023, Albemarle expects revenue to be 55% to 75% higher than in 2022. Additionally, the company expects adjusted earnings per share to increase a whopping 50%.
Better, analyst Michael Sison added the ALB stock to the firm’s list of “signature picks.” He already has a buy rating on the stock with a $350 price target. Finally, Albermarle also declared a quarterly dividend of 40 cents a share, or $1.60 annualized. It’s payable on Apr. 3 to shareholders of record as of Mar. 17.
Lithium Americas (LAC)
smartphone with logo of Canadian company Lithium Americas Corp on screen
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Another red-hot “no-brainer” lithium stock to buy and hold is Lithium Americas (NYSE:LAC). For one, General Motors is investing $650 million into Lithium Americas’ Thacker Pass mine in Nevada. Lithium Americas estimates the lithium extracted and processed from the project can support the production of up to 1 million EVs per year, according to a GM press release.
Even better, the company just commenced construction at Thacker Pass following the receipt of notice to proceed from the Bureau of Land Management. “Starting construction is a momentous milestone for Thacker Pass and one we have been working towards for over a decade,” said Jonathan Evans, President, and CEO.
Livent Corp. (LTHM)
Livent Corporation logo on a phone screen. LTHM stock.
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Or, look at Livent Corp., a company that is moving forward with its lithium hydroxide project in North Carolina and its carbonate expansion in Argentina.
In Argentina, the company’s first 10,000 metric ton expansion of its lithium carbonate production is essentially complete. Thus, it’s expected that commercial volumes can be expected to roll in sometime in the second half of 2023. In North Carolina, the company is qualifying products with customers at its new 5,000 metric ton lithium hydroxide line and will deliver commercial volumes in 2023.
Additionally, the company’s year-over-year earnings growth has been solid. In fact, for Q4 2022, revenue jumped 79% to $219.4 million. GAAP net income was up 1,003%. Adjusted net income jumped 440% to $84.2 million. Finally, the company’s GAAP earnings per share jumped a whopping 875%, and adjusted earnings per share increased 400%.
Sociedad Quimica y Minera (SQM)
a lithium mine, ATLX stock
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Sociedad Quimica y Minera is setting aside $3.4 billion in new capital expenditures to boost production capacity to 210,000 tonnes of lithium carbonate after posting impressive earnings.
Similar to Livent, the company has posted impressive results. Net income, for example, came in at $3.9 billion in 2022, a nearly three-fold increase from the $585.5 million raked in for 2021. Total revenues jumped to $10.7 billion from $2.9 billion year over year. Better, SQM is bullish on lithium, expecting demand to reach about 1.5 million tonnes by 2025. SQM stock also yields 8.74%.
American Lithium (AMLI)
a pile of lithium
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American Lithium (NASDAQ:AMLI) is another no-brainer lithium stock to buy right now. The stock recently moved to the Nasdaq, and could see higher highs with patience.
At the moment, the company has two interesting lithium projects. One is the TLC Lithium Project, located near Tonopah, Nevada. The other is the Falchani Lithium Project located in Peru, which represents the sixth-largest lithium deposit in the world, according to American Lithium’s website.
On the date of publication, Ian Cooper did not have (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Ian Cooper, a contributor to InvestorPlace.com, has been analyzing stocks and options for web-based advisories since 1999.
