If you are looking for the most undervalued lithium stocks to buy now, you’ve come to the right place. These companies represent the best deals in the market, trading at attractive valuations and having promising outlooks for the future.
I chose these lithium stocks to buy due to their robust competitive advantages and wide moats in the industry. They have established themselves as low-cost producers, leveraging economies of scale and favorable mineral deposit locations. Their operational strengths allow them to extract lithium cost-efficiently, providing an edge over rivals.
The electric vehicle (EV) market is experiencing significant growth. The International Energy Agency reported that approximately 18% of new car sales in 2023 were electric. In the first quarter alone, more than 2.3 million EVs were sold, a 25% increase compared to the previous year. With the demand for lithium outpacing supply and this trend expected to continue through 2030, lithium stocks present a compelling investment opportunity.
Here are seven lithium stocks to buy now or regret forever, offering substantial growth opportunities for your portfolio.
Albemarle (ALB)
Albemarle (NYSE:ALB) reported strong financial performance for the first quarter of 2024, with net sales of $1.4 billion. This growth was primarily driven by the increased demand for lithium in energy storage and electric vehicles. Despite some challenges with weaker demand in specific sectors, the company’s adjusted EBITDA remained robust.
Furthermore, Albemarle introduced a project plan for its Kings Mountain Mine, which is one of the few known hard-rock lithium deposits in the U.S. This mine is expected to produce approximately 420,000 tons of lithium-bearing spodumene concentrate annually, significantly bolstering the U.S. supply chain for lithium.
Also, Albemarle completed a $2.3 billion public mandatory convertible preferred stock offering. This move aims to enhance the company’s financial flexibility and support its growth investments.
All of these developments position ALB well for the future, which makes it one of the best lithium stocks for investors to consider.
Lithium Americas (LAC)
Lithium Americas (NYSE:LAC) stands out in the lithium market, driven by several recent strategic developments and projects.
One of the company’s most significant initiatives is advancing the Thacker Pass project in Nevada, which hosts North America’s largest known measured and indicated lithium resource. The first phase of this project is targeted for production by 2027, to produce 40,000 tons per annum of battery-quality lithium carbonate.
In addition to the Thacker Pass project, Lithium Americas reported strong financial results for the first quarter of 2024. The company highlighted substantial progress in de-risking the construction of Thacker Pass, including significant earthworks and the establishment of crucial infrastructure such as water supply systems and improved transportation routes.
Also, analysts have set various price targets, with a consensus target price of around $11.46, indicating potential upside from current trading levels. This confidence is bolstered by major investments from notable entities, such as General Motors (NYSE:GM), which recently purchased over 15 million shares of Lithium Americas.
Arcadium Lithium (ALTM)
Arcadium Lithium (NYSE:ALTM) reported solid financial performance for the first quarter of 2024, driven by strong average realized lithium hydroxide and carbonate pricing, which exceeded $20,000 per metric ton. The company achieved a net income of $15.6 million. Despite facing some challenges, the company remains on track to realize significant synergies and cost savings of $60 to $80 million in 2024.
Adding to the bullish thesis for ALTM is that its revenue this year and next year is expected to swell 44% and 37%, respectively, according to analysts who cover ALTM. Very sizable EPS increases in the double digits are also predicted on the horizon.
Given these facts, I think ALTM could be a great addition to many investors’ portfolios. Furthermore, ALTM has one of the lowest valuations out of all the lithium stocks on this list, with the company trading at a tiny forward price-to-sales ratio of just 1.7x.
Sociedad Quimica y Minera de Chile (SQM)
Sociedad Quimica y Minera de Chile (NYSE:SQM) made several strategic moves that highlight its strong position in the lithium market.
SQM entered into multiple long-term supply agreements with major companies. Notably, SQM signed a significant long-term lithium supply agreement with Hyundai Motors and Kia in June. This agreement ensures a stable supply of lithium, which is crucial for producing electric vehicles.
Also, for the first quarter of 2024, SQM reported strong financial results with continued lithium and derivative sales growth. SQM’s earnings report highlighted substantial contributions from its lithium segment, which is driven by the high demand for electric vehicle batteries.
SQM could be a worthy pick for U.S.-based investors. It offers international diversification in a growing segment of the economy, which may improve investors’ diversification and potentially risk-adjusted returns. These factors are important for all investors, but especially those who may invest primarily or solely in the U.S.
Pilbara Minerals (PILBF)
Pilbara Minerals (OTCMKTS:PILBF) is a notable player in the lithium market.
Despite a challenging market, Australia-based Pilbara Minerals reported a net profit of $220 million AUD ($146.4 million) for the first half of 2024, although this represented a significant decline from the previous year due to lower lithium prices. The company remains financially resilient and continues to focus on optimizing its operations.
Pilbara Minerals successfully extended its supply deal with Chengxin Lithium, ensuring a steady demand for its spodumene concentrate. Additionally, the company has entered into new agreements with other major players, including LG Energy Solutions.
Looking ahead, PILBF is focused on expanding its Pilgangoora Project, one of the largest hard-rock lithium-tantalum deposits in the world. This project is integral to Pilbara Minerals’ growth strategy, which aims to increase production capacity to meet the rising global demand for lithium, driven by the EV market and renewable energy storage solutions.
PILBF may meet one’s requirements if they seek to invest in a company outside of the U.S. that’s heavily involved in the materials sector but in the developed economy of Australia.
E3 Lithium (EEMMF)
E3 Lithium (OTCMKTS:EEMMF) is advancing its Clearwater Lithium Project in Alberta, which boasts a substantial resource base. The project has 16 million metric tons of lithium carbonate equivalent (LCE) in measured and indicated resources, with an additional 0.9 million metric tons inferred.
E3 Lithium is actively developing relationships with potential customers, including those in the automotive and battery manufacturing sectors. These efforts are expected to culminate in agreements securing future revenue streams. Completing the Pre-Feasibility Study has been a significant milestone, enabling the company to progress toward commercial production.
Beyond the Clearwater Project, E3 Lithium is evaluating additional resources in the Exshaw and Rocky areas and in Saskatchewan. The company raised over 30 CAD million in 2023 ($21.8 million) through capital raises and grant funding, leaving it capitalized to execute its 2024 plans.
These factors position EEMMF well for the future as one of those lithium stocks to buy.
Sigma Lithium (SGML)
Sigma Lithium (NASDAQ:SGML) announced a substantial 40% increase in proven and probable reserves at its flagship Grota do Cirilo mine in Brazil, raising the total to 77 million metric tons of lithium oxide (Li2O). This expansion extends the mine’s productive life to an estimated 25 years, ensuring long-term resource availability. The company plans to nearly double its production capacity to 520,000 metric tons per year by 2025, from the current 270,000 metric tons yearly.
In the first quarter of 2024, Sigma Lithium achieved a premium price of $1,290 per metric ton for its lithium concentrate, with production costs at $397 ton, positioning it as the “second-lowest cost producer in the industry.” The company generated over 52,800 metric tons of lithium concentrate in the first quarter alone.
SGML is another great example of a lithium stock that’s rapidly scaling its production capacity to meet the global need for EVs and batteries. I believe we’ve only just started to tap into its potential.
On the date of publication, Matthew Farley did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.