Mayeb TLH should consider the option of dividends as well....seems the big players have!!!!!!!!!!!
Matthew McCall provided an update of the three largest
lithium mining companies on investopedia.com. As the world implements and shifts to green policies free themselves from high energy costs and global warming, there will be a select number of winners in the stock market. A major trend happening now includes seeing more electric cars on the road, especially in emerging markets.
According to studies, China and Europe are more receptive to the electric cars, while Americans continue to second-guess the viability of them. With major companies including
General Motors (NYSE:
GM) and
Toyota (NYSE:
TM) pushing fuel-efficient vehicles, it is difficult to pick the winner in regard to investing.
This is why I turn to the batteries that will be going into the vehicles, and even more specifically, the lithium within the batteries. I have written about lithium stocks in the past, and over the past week the Big Three of lithium have rallied to new highs, so now is an appropriate time to provide an update in this sector.
Chemical & Mining Company of Chile(NYSE:
SQM) is the world’s largest lithium producer, but it is mainly known as a fertilizer company to most investors. Along with lithium, the company has three more business segments: specialty plant nutrition, iodine and industrial chemicals. During its last earnings report, the company saw net income increase by 45.6% from a year earlier as sales rose by 23.6%. The stock currently trades with a PE ratio of 25.7 and pays a 0.7% dividend. Technically, the stock is trading near an all-time high and needs to pull back to the low $60s before entering.
Rockwood Holdings (NYSE:
ROC) is a diversified chemical company that is the world’s leading manufacturer of lithium-based compounds through its Chemetall division. The company announced last month that it will increase lithium product prices by 20% to keep up with increased costs. This will also allow the company to boost production now that prices are back to 2008 levels. The stock is also at an all-time high and trades with a very reasonable forward P/E ratio of 14.1. A buy zone would be the mid $50s.
Not to be outdone is
FMC Corp. (NYSE:
FMC), which is similar to ROC as a diversified chemical company that is one of the Big Three in lithium production through its FMC Lithium division. The company also announced a 20% increase in lithium prices last month, allowing for high margins to cover increased expenses. This stock trades with a forward P/E ratio of 13.7 and pays a dividend of 0.7%. Technically it joins the other two at an all-time high.
Alternative Option
Investors wanting exposure not only to the lithium suppliers, but also the battery makers, can opt for the
Global X Lithium ETF (NYSE:
LIT). The ETF is dramatically lagging the Big Three due to its 50% exposure to the battery makers. Lithium stocks are outperforming as the battery companies continue to struggle with sales and expenses. For a pure play lithium investment, the best choice would be to concentrate on the Big Three.
Commentary: While I enjoyed reading this article and his coverage on these big 3 firms, I noticed he forgot about Talison Lithium. Its one company who’s currently the lone lithium pre play and will be expanding production in the near future t0 740 000 tpa of lithium concentrate. Tells you the big 3 will about to become the big 4 in short time. Least he does know that the Global X lithium fund may not be the best index to invest purely in lithium, because of its weight among battery manufacturers.