Elon Musk, in positive news, plans to step up his net-zero carbon emissions campaign with a lithium compound for use in Tesla’s batteries. The idea is that Tesla will then demonstrate how reliant the electric vehicle sector is when using lithium. It’s the lightest metal on earth, and, fun fact: it’s not only the lightest metal but the lightest and least dense solid material on Earth. More importantly, the global energy industry must finally steer away from oil, gas, and coal. There are many other types of metals in play, and they come with their own value. My list today is focused on lithium – typically recognized as a gas or a mood stabilizer – which is, before anything else, a silver and white colored alkali rare earth metal essential for batteries in a broad spectrum of renewable energy projects.
In its solid metal form, lithium is utilized in batteries for mainly two things: Cell phones and electric vehicles. Lithium producers comprise specialists and lower-scale operations known as “junior miners,” who search for the metal and try to construct mines. The former provides security, while the ladder is riskier. But, they could deliver extraordinary profits to investors if the junior miners can prove themselves (by successfully constructing mines). Lithium prices are subject to ups and downs but show high growth now. If we choose to invest, we could do so through lithium ETFs or futures. However, I’m going to say, instead, that the best way is through individual publicly traded lithium stocks.
Now, I’ll reiterate how vital resilience is, how helpful a great track record can be, and that, yes, numbers are more than just numbers– at least in the context of today’s list. The best and brightest of economists agree that we should introduce these winners to our portfolio:
Albemarle Corp (ALB)
Albemarle Corporation (ALB) is a maker of specialty chemicals. ALB was the top supplier of lithium for electric vehicle batteries in 2020. At one point, ALB, Sociedad Qumica y Minera, and FMC Corp were responsible for 50% of the world’s lithium and lithium storage goods. However, times have changed, not because ALB is no longer a significant player, but with capitalism doing what it does, others have begun to share the spotlight. ALB has manufacturing facilities in China, the U.S., the Netherlands, Austria, France, Belgium, the U.K., and Germany. ALB has also focused on boosting fuel stability. Headquartered in Charlotte, North Carolina, ALB was founded on February 28th, 1994.
ALB’s strength among its peers in the industry is pretty transparent. With a valuation (or cap) of roughly $30 billion, ALB’s revenue and EPS forecasts of $2.6 billion at $7.74 per share are just for Q4, which has time yet to go. Now I’ll lay out ALB’s Q3 results (y/y growth) in the crucial areas: Revenue – $2.09 billion (+151.85%), EPS – $7.50 per share (+614.29%), Net Income – $897.22 million (+328.43%), and a Profit Margin of 42.89% (+190.70%). ALB is considered below its fair value, yet its stock is up by 10.24% year-to-date and has a decent enough P/E ratio of 19.5x. ALB has a dividend yield of 0.61%, with 39 cents per share to be paid quarterly ($1.56 a year per share). Analysts who offer yearly price projections give ALB a median price target of 322.50, with a high of 461.00 and a low of 155.00. This indicates a 25.15% leap from ALB’s last price. Analysts are telling us to buy. They don’t sound crazy.
Energizer Holdings Inc (ENR)
Energizer Holdings, Inc. (ENR) produces, markets, and distributes home batteries, specialty batteries, and a variety of light bulbs (differing in size and brightness). ENR also creates and markets automobile aesthetic, refrigerated, performance, and freshener products. Successfully so, ENR operates through two segments: Batteries and Auto Care. ENR was created in 2000 and is based in St. Louis, Missouri.
ENR’s stock price is down by 14.44% year-to-date and under fair value, which could theoretically provide an estimated 48% return. ENR’s volatility measure is per the overall market, and we can take some comfort in its P/E (Price-to-Earnings) ratio of 11.21x and its P/S (Price-to-Sales) metric of 0.58. From the end of last year, ENR has brought in $3 billion in revenue, while its market value is decidedly less, at $2.5 billion. ENR’s EPS, while beating analysts’ estimates consistently, is projected to show year-over-year growth of 421.83%. ENR has a dividend yield of 3.50%, with a quarterly payout of 30 cents per share, or $1.20 annually. Analysts who provide 12-month pricing projections have given ENR a median price target of 35.00, with a high of 45.00 and a low of 30.00. However leveled out, it’s an increase from ENR’s current price, only supporting analysts’ sentiment, which is to buy now and hold.
TDK Corp (TTDKY)
TDK Corporation (TTDKY) is a Japanese multinational electronics organization that has been a long-time producer of electrical components, recording devices, and data storage. (TTDKY) has received plenty of attention here in the U.S. as it pushes itself further and further into the world of lithium-ion batteries and charging equipment. TTDKY’s slogan is “Contribute to culture and industry through creativity.” TTDKY is a component of the Nikkei 225 and TOPIX indexes and is traded on the Tokyo Stock Exchange.
TTDKY being a Japanese firm, I’ll stick as close as I can to whole-numbered figures and percentages to prevent currency confusion. TTDKY, currently working with a profit margin of 6.9%, has a return on equity margin of 11.47%. TTDKY, luckily for cautious investors, has a lower-than-average P/E ratio of 11.98x and a P/S measure of 0.82. Its year-over-year growth: Revenue +28.97%, Net Income +33.63%, Profit Margin +3.55%, and EPS growth of 33,64%. TTDKY’s dividend yield is 2.10%, with a (USD) quarterly payout of 18 cents per share ($0.72 yearly). TTDKY’s stock price is down by 11.82% year-to-date, which hints at a bargain. Analysts who provide 12-month pricing estimates have given TTDKY a median price target of 43.57, with a high of 49.86 and a low of 31.94. The forecast shows a 26.23% increase over its current chart position. More important than what separates Japanese and U.S. currencies is that the two countries can earn money together. TTDKY has a solid buy rating.
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