As the world starts moving to renewable energy, Lithium, nicknamed ‘white gold’ used for making lightweight power-dense batteries is making waves across the financial and commercial markets.
According to analysts, the global lithium production was 737,000 tons in 2022. It is expected to rise to 1.7 million tons by 2024. Lithium was widely used in making smartphone batteries but is also making waves for its role in powering electric vehicles.
In this scenario, investing in the best lithium stocks can be highly profitable for investors. However, the list of publicly traded lithium companies is scarce and most of them are not even listed on the U.S. stock exchanges. This leaves investors with a limited range of options for buying lithium battery stocks.
We have compiled a list of the best lithium stocks to buy on the market. All these stocks are great options and are driven by the rising prevalence of EV growth.
Let’s dive in.
What are Lithium Stocks?
Lithium stocks are commodities that are focused on mining, refining, and distribution of a metal called lithium. The companies included in the category of lithium stocks may be involved in the mining and distribution of other types of metals with a focus on lithium.
Lithium is a metal that is used for making batteries for smartphones and electric vehicles. This metal is used to create lightweight, power-dense batteries that increase the efficiency of EVs. As the world started adopting electric vehicles, Lithium saw a boom in price. This caused lithium stocks to become extremely valuable and a great investment option for investors.
Best Lithium Stocks to Invest in 2024
Here is the list of the best lithium battery stocks that could be profitable in 2024.
Albemarle Corporation(ALB)
Albemarle Corp is one of the leading lithium miners with a market cap on par with leading gold miners like Barrick Gold Corporation. It is one of the most prominent and largest lithium stocks in the United States.
However, since Lithium prices have seen a dip in 2023, ALB stocks are volatile. But, thanks to the company’s scale and the long-term forecast demand for EVs, Albemarle is one of the best lithium stocks to buy on the market.
- Market Cap: $15.1 billion
- Enterprise Value: $17.1billion
- Three-year return vs. sector: -11.7%
Sociedad Química y Minera S.A.(SQM)
Chile is a well-known hotspot for Lithium mining and Sociedad Química y Minera S.A.(SQM) is at the forefront of South America’s mining industry. While SQM mines other metals and minerals, a majority of the company’s business is focused on Lithium. In 2022, during the boom of EVs, the company posted the highest revenue in its history, crossing $10.7 billion in sales. More than 76% of that amount was attributed to lithium mining and related products.
Shares of SQM were up till the end of 2022 when they plummeted due to weaker lithium prices and the fear that the government takeover would impact the company negatively.
- Market Cap: $15.1 billion
- Enterprise Value: $16.1 billion
- Three-year return vs. sector: +30.6%
Mineral Resources Limited(MALRY)
Mineral Resources Limited(MALRY) is a global materials company based in Australia with a portfolio that includes iron ore mining, a robust lithium output and logistic services. In FY 2022, MALRY recorded an earning of over $380 million from its lithium business. Moreover, a joint venture with Albemarle in the future could produce even bigger yields.
However, Mineral Resources is traded over the counter in the United States, meaning its liquidity is very low, with an average trading volume of only 1,000 shares per day.
- Market Cap: $7.9 billion
- Enterprise Value: $9.1 billion
- Three-year return vs. sector: +77.1%
Livent Corporation(LTHM)
While Livent is a smaller corporation compared to others on this list, it is still one of the best lithium stocks to buy. The company’s sole business is battery-grade lithium hydroxide, making it a great option for investors looking to invest in lithium.
LTHM is also projected to grow exponentially with a $1 billion capital spending to expand capacity in its Argentina operations by 2026. These investments continue to boost LTHM’s revenue and footprint in the lithium industry.
- Market Cap: $2.7 billion
- Enterprise Value: $2.9 billion
- Three-year return vs. sector: -8.6%
Lithium Americas Corp.(LAC)
Lithium Americas Corp is the smallest company on this list according to market cap. However, it is one of the best lithium stocks in terms of five-year appreciation. Since 2018, the stock has almost tripled in value, outperforming even the biggest players in the industry.
Moreover, LAC is also listed on the New York Stock Exchange and boasts incredible liquidity, with a volume of 1 million shares traded per day. While there is not a lot of forecast or analyst data available for the company, we can expect continued profitability from the company going forward.
- Market Cap: $1.1 billion
- Enterprise Value: $1.0 billion
- Three-year return vs. sector: N/A
Sigma Lithium Corporation(SGML)
Sigma Lithium Corporation surpasses all other lithium stocks when it comes to returns. It is a Canadian company that has provided investors with a 3000% return over the past three years. However, analysts forecast that SGML will operate at a loss this fiscal year.
It is quite uncertain whether SGML’s monumental rise can continue or not. However, its great run makes it one of the lithium stocks to buy in 2024.
- Market Cap: $3.3 billion
- Enterprise Value: $3.3 billion
- Three-year return vs. sector: +1,281%
Ganfeng Lithium Group Co.(GNENF)
Ganfeng Lithium Group is a China-based company that operates globally with mining operations in Australia and Africa. However, one major drawback is that the company is only listed on the Hong Kong Stock Exchange and the Shenzhen Stock Exchange. No major US stock exchanges trade GNENF. Moreover, this means you are trading OTC, with a daily trading volume of only a few hundred shares.
The unique nature of this Chinese Lithium company makes it one of the best lithium mining stocks, given that you trade responsibly using limited orders and small lot sizes.
- Market Cap: $10.1 billion
- Enterprise Value: $12.1 billion
- Three-year return vs. sector: -40.1%
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Pilbara Minerals Limited(PILBF)
Australia’s Pilbara Minerals owns a 100% stake in a lithium project located in the Pilbara region of Western Australia. Pilbara is a bit difficult to access as it trades over the counter and lacks analysis coverage in the United States.
However, its average daily trading volume is more than 200,000 shares and its 2022 annual reports recorded a profit of more than $500 million in adjusted earnings.
- Market Cap: $7.5 billion
- Enterprise Value: $5.6 billion
- Three-year return vs. sector: +339.1%
Final Words: Is it Worth Investing in Lithium Stocks?
After many lithium stocks soared in 2021, the sector plummeted in 2022 and many stocks witnessed decreased value. This is largely due to the volatility and cyclical nature of the market. In 2021, Goldman Sachs warned that the lithium stock prices were too high according to the market conditions. This prediction was accurate as prices have since dropped to Goldman Sach’s target range.
Moreover, the Federal Reserve has also raised interest rates which contributes to the overall decline of the stock market as a whole. However, if the demand for lithium-powered EVs continues to grow, Lithium will be a profitable long-term investment, even if it goes down from time to time.
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Frequently Asked Questions(FAQs)
Ans. There are not many options when it comes to lithium stocks as most of them are not traded on any major U.S. stock exchange. However, Albemarle is the world’s largest lithium producer and one of the best lithium companies to invest in.
Ans. Albemarle is the biggest lithium mining company in terms of market cap and production. It can produce over 225,000 metric tons of lithium raw material in a year.
Ans. Whether lithium stocks are a good investment for you depends on your investment goals, financial condition, risk tolerance, and other factors. However, lithium stocks can be a great long-term investment for investors.
