As long as there’s a strong push for electric vehicles, and all things green, we’ll need as much lithium as we can get our hands on. Even oil giants see the potential of the lithium boom. Exxon Mobil (NYSE:XOM), for example, just bought drilling rights for lithium in Arkansas. Chevron (NYSE:CVX) is also considering opportunities to produce lithium with all of the demand. It’s why we’re pounding the table over buy on dip lithium stocks.
With supply issues mounting, prices could rocket even higher. Especially with analysts projecting for demand to jump about 40x over by 2040 thanks to electric vehicles. Even the Biden Administration is still encouraging the development of lithium reserves, as major automakers become concerned about shortages, and an inability to ramp up EV production.
That being said, I’d use every dip in lithium stocks as an opportunity to buy more. In fact, some of the top buy on dip lithium stocks to own now.
Albemarle (ALB)
Over the last few days, shares of Albemarle (NYSE:ALB) slipped from a high of $246 to $210.02, where it appears to have found strong support. I’d be a buyer here, especially with this 800lb. gorilla as one of the top go-to lithium companies. Helping, analysts at Wells Fargo reiterated an overweight rating on the ALB stock, with a price target of $270 a share. UBS also has a buy rating on ALB with a price target of $225 from $196 a share.
The company also announced a new quarterly dividend of 40 cents a share, payable Oct. 2 to shareholders of record, as of Sept. 15. Plus, ALB is still trading at less than growth with a PEG ratio of just 0.54 at the moment.
Sociedad Quimica y Minera (SQM)
Trending higher, Sociedad Quimica y Minera (NYSE:SQM) is another hot lithium stock to buy on every dip. In fact, it just fell slightly from about $80 to $72.23, where it caught strong support. From here, I’d like to see it break above resistance at $80, with a potential test of $90 a share.
There are a few things to like about SQM here. One, it just announced a long-term agreement with Ford Motor (NYSE:F) to secure a high-quality lithium supply. Two, as we wait for the stock to recover, we can collect a dividend yield of 11.75% at the moment.
Even better, as noted by Investorplace contributor Tyrik Torres, “SQM is the second-largest producer of lithium in the world, with operations in both Chile and Argentina. The company also boasts one of the largest mines in the world at Salar de Atacama, Antofagasta, Chile. Salar de Atacama not only provides a low-cost and high-quality source of lithium brine but is one of the largest and richest salt flats in the world.”
Standard Lithium (SLI)
The last time I mentioned Standard Lithium (NYSEAMERICAN:SLI), it traded at $4.30 on June 26. After testing $4.80, it now trades at $4.44, with a good deal of momentum ahead of it.
Remember, as I also noted on June 26, “The company just said it found the ‘highest grade brine’ in Arkansas with a grade of 581 mg/L.” Making that even more attractive, Exxon Mobil just bought drilling rights to 120,000 gross acres in the Smackover Formation of southern Arkansas. Perhaps the two will work together at some point given their close proximity. But that’s just speculation on my part.
Even more impressive, according to a recent earnings release, “Standard Lithium expanded its portfolio of projects in the Smackover Formation, acquiring the rights to one existing well and to drill a new deep well in East Texas. This builds on the Company’s work over the past three years to identify the most prospective areas in East Texas to secure high-quality brine resources.”
On the date of publication, Ian Cooper did not hold (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
