Three lithium stocks to benefit from growth tailwinds

The global lithium-ion battery market is poised to top US$70 billion by 2025, and these producers are well-positioned to reap a windfall of growth and profitability

Vikram Barhat 28 December, 2018 | 6:00PM

Growing environmental awareness and a regulatory push for clean energy continue to accelerate adoption of electric vehicles (EVs) and alternative sources of energy. As a result, the market for battery storage has seen exponential growth in recent years. One of the direct consequences of the rechargeable battery trend is the demand spurt for lithium. A key component of rechargeable batteries, lithium is crucial for the production and proliferation of EVs, smartphone batteries, and battery storage packs that both supplement and substitute conventional grid-connected energy.

The global lithium-ion battery market is poised to top US$70 billion by 2025, growing 15% annually. Much of the demand is fueled by what appears to be just the beginning of the EV revolution. As battery-powered cars, longer-lasting smartphones batteries, and stationary storage gain traction, demand for lithium is expected to continue to grow steadily.

Leading lithium producers are well-positioned to reap a windfall of growth and profitability from these trends. At their current valuations, far below their fair value, it’s hard to ignore their upside potential and their attractiveness as long-term investment bets, according to Morningstar equity research.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Albemarle Corp173.71 USD-1.53
FMC Corp114.45 USD-0.48
Sociedad Quimica Y Minera De Chile SA ADR56.76 USD-0.73

About Author

Vikram Barhat

Vikram Barhat  Vikram Barhat is a Toronto-based financial writer specializing in investing, stock markets, personal finance and other areas of the financial services industry. He also writes for CNBC, BBC, The Globe and Mail, and Toronto Star.

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