Whether or not you’re an ESG investor renewable vitality or a thematic investor following the worldwide uptick in demand for renewable supplies, lithium shares have possible piqued your consideration. There are quite a lot of choices for lithium shares to purchase, which begs the query: which corporations are best-positioned to provide traders market-beating ROI?

When you’re contemplating which lithium shares to purchase in 2022, take the time to judge every firm’s fundamentals, in addition to its function on this high-demand market. Are you curious about corporations that carry out extraction? Midstream refinement organizations? Built-in lithium pure-play corporations? It’s value understanding what’s on the market earlier than diving into this market.

Beneath, you’ll discover a checklist of the 5 most promising lithium shares to purchase proper now, encompassing all features of the market. Whereas all of them take a special method to producing revenue, all of them have one factor in frequent: lithium.

5. Sociedad Quimica y Minera de Chile (NYSE: SQM)

The world’s largest producer of lithium merchandise is a no brainer on this checklist. Not solely does the world’s rising demand for lithium merchandise solidify SQM’s spot amongst lithium shares to purchase proper now, its financials are greater than sufficient to justify a case for each short- and long-term traders.

The quarterly earnings progress for Sociedad Quimica y Minera de Chile is thru the roof, registering 979.50% as of its newest earnings report. That is due largely to its quarterly gross sales progress, which ticked up 282.20%. With an working margin of 44.50% and gross sales of $4.35 billion, this firm has firmly entrenched itself as the most effective lithium investments on the market. Better of all? It’s price-to-earnings progress (PEG) is a sexy 0.54, with cheap valuation throughout comparable metrics.

4. Albemarle (NYSE: ALB)

One other of the world’s largest lithium suppliers, Albemarle is a sexy funding on this booming area of interest. The corporate’s five-year EPS outlook of 46.14% is engaging given the present financial local weather, and it’s backed up by wholesome gross sales progress of 36%. A low debt load and a really wholesome working margin of 26.50% open the corporate as much as long-term stability: one thing an increasing number of interesting to traders as we speak.

The one actual knock towards Albemarle is an astronomical P/E of 102.25 and a PEG of two.22. The corporate seems overvalued at its present share value, which might make it a troublesome place to open for these searching for worth within the lithium area. Nonetheless, it’s an trade chief with only a few direct opponents.

3. Lithium Americas (NYSE: LAC)

Lithium Americas has been on an upward trajectory since 2020 and reveals no indicators of slowing. The corporate peaked at practically $40 per share in early April 2022, however has since retracted to the mid-$20 space, which is definitely a great factor for critical traders. At present ranges LAC is far more fairly valued (although nonetheless on the excessive facet).

Lithium Americas is at present laying the groundwork to turn into a big-time participant within the lithium area, with operations in each North and South America. Its stability sheet won’t look all that spectacular as we speak; nevertheless, it has an EPS outlook of greater than 350% within the 12 months forward! Whereas that’s an formidable goal for a corporation that has but to submit profitability, it’s not far off. Buyers seeking to roll the cube on a long-term lithium play will wish to take a second have a look at LAC.

2. Livent (NYSE: LTHM)

Spun off from FMC (NYSE: FMC) in 2018 to create a lithium pure-play enterprise, Livent is a really engaging participant within the area proper now. It’s one of many prime lithium shares to purchase and one with an extended runway forward of it. The corporate is already worthwhile, reporting $54.6 million in revenue on $472.2 million in gross sales. Its gross sales are additionally on the rise, rising 56.50% during the last quarter. Low debt load makes it an much more engaging long-term play.

As is the case with different lithium shares, Livent is wildly overvalued at present ranges. It has a P/E of 112.38 and, extra alarmingly, a PEG of 112.38. Its P/C can be at 70.04, signaling to traders that they’re paying a major premium. Nonetheless, a share value under $30 is engaging sufficient to contemplate a starter place.

1. Ganfeng Lithium (OTC: GNEN.F)

Many traders are hesitant to put money into Chinese language corporations on account of considerations about transparency and the looming risk of geopolitical tensions. That stated, it’s troublesome to discover a extra engaging lithium inventory to purchase than China’s largest lithium producer: Ganfeng Lithium. The corporate has accomplished nothing however outperform, and its financials maintain as much as scrutiny.

In its most up-to-date earnings report, Ganfeng Lithium posted $5.37 billion in income, leading to greater than $3.5 billion in web revenue: a 640% year-over-year enhance. That is due to a 65% revenue margin. The corporate’s five-year trendline paints an image of the world’s rising dependence on lithium and this firm’s capability to produce it to main patrons like Tesla (NASDAQ: TSLA). It’s one of many prime corporations on the earth and a prime lithium inventory to purchase and maintain long-term.

Future Prospects of Finest Lithium Shares to Purchase

Demand for uncooked supplies is on the rise throughout just about each sector, and lithium is a frontrunner when it comes to viable functions and accompanying demand. The longer term is vibrant for lithium, and even brighter for the businesses able to supplying it to producers. Take a more in-depth have a look at any of the 5 corporations above on the subject of investing in lithium for the long-term.

Need extra details about the supplies market and the function of metals like lithium in thematic investing traits? Try the very best funding newsletters and subscribe to any that pique your curiosity on the subject of following market demand. At this time, lithium is the hot-ticket merchandise; ensure you know what’s subsequent.