Lithium shares are on fireplace. Irrespective of the place you look, from well-established lithium mining corporations to younger gamers which can be but to generate any income, most lithium mining shares have surged by triple-digit percentages in simply the previous couple of years or so.

It is no coincidence that the electrical car (EV) business took off at across the identical time — international EV gross sales rose 40% in 2020 after which doubled in 2021 to file highs. Two issues surged alongside EV gross sales: demand for lithium-ion batteries that energy almost each EV on the market right now, and investor curiosity in lithium mining shares.

This might simply be the start. EVs nonetheless made up barely 10% of world automobile gross sales in 2021, and demand for lithium-ion batteries may develop at a compound annual common charge of 30% over the following decade, in accordance with consulting agency McKinsey & Firm. Lithium costs already hit file highs in March this yr.

In brief, now’s the time to spend money on lithium shares to play the approaching EV increase. Listed here are the 2 high lithium shares to load up on proper now.

This no-brainer lithium inventory is rising gross sales exponentially

Among the many few pure-play lithium corporations buying and selling publicly right now, Livent (LTHM 0.83%) inventory stands out for a number of causes.

First, Livent, as I discussed, is a lithium pure-play that generates greater than 90% of its income from lithium compounds, particularly battery-grade compounds. Investing in Livent inventory, subsequently, is without doubt one of the finest methods to realize publicity to lithium.

Second, Livent is a vertically built-in lithium producer and might subsequently produce lithium at low prices. It primarily operated in Argentina and generated a gross margin of 21% in 2021.

Third, Livent is increasing its manufacturing capability aggressively. Between 2022 and 2030, Livent expects to develop its lithium carbonate capability by fivefold. The compound primarily goes into the making of EV batteries. The lithium miner can also be pumping cash into battery-grade lithium hydroxide and expects to just about triple capability by 2030. In reality, Livent not too long ago struck a six-year settlement with legacy automaker Common Motors to produce it with lithium hydroxide for EVs beginning in 2025.

In its newest quarter, Livent’s web revenue jumped virtually tenfold yr over yr, main the lithium miner to spice up its full-year income and earnings steerage. With Livent now focusing on virtually 100% progress in income on the midpoint for 2022, it seems like a no brainer lithium inventory to spend money on.

This top-notch lithium inventory can also be a dividend powerhouse

Albemarle (ALB 2.42%) could be dabbling in bromine and petrochemical catalysts, however lithium is what the corporate is concentrated on proper now. Within the 12 months ended March 31, Albemarle generated 45% of its complete gross sales from lithium. The commodity contributed barely 36% to its gross sales in 2019.

In reality, Albemarle is without doubt one of the world’s largest lithium mining corporations right now, and that is what makes it such a compelling lithium inventory to spend money on.

Albemarle is aware of the place progress lies: Almost 70% to 80% of its lithium income this yr is predicted to come back from battery-grade compounds, and by 2026, Albemarle expects vitality storage (primarily EV batteries and grid) to make up greater than 85% of its lithium income backed by fast capability enlargement throughout the U.S., China, and Australia.

Albemarle is evidently focusing on the world’s high EV markets — the U.S. and Europe mixed are anticipated to carry virtually 1 / 4 of its lithium income by 2026 in contrast with lower than 5% income final yr. Furthermore, China alone may contribute 40% to 45% to its lithium income, and the remainder of Asia the remaining portion. China and Europe are the most important EV markets on the earth.

Albemarle is firing on all cylinders. It grew gross sales by 97% yr over yr in its second quarter and bumped up its full-year outlook, now projecting a staggering 121% progress in 2022 gross sales on the midpoint. Thank lithium for that. 

Should you’re nonetheless not satisfied, here is another excuse why Albemarle is without doubt one of the finest lithium shares to purchase: It’s a Dividend Aristocrat, having elevated its dividend yearly for 27 consecutive years now.

Value your cash

Some buyers imagine they’ve missed the rally in lithium shares. Removed from it. Lithium has discovered its approach into one of many quickest rising industries right now — EVs. But lithium mining is not simple, which suggests present gamers may develop dramatically if they’ll exploit their sources and capabilities to the hilt. Albemarle and Livent are able to doing so, and also you’re prone to be richly rewarded in the long run when you purchase these lithium corporations shares now.