Albemarle’s (NYSE:ALB) leading lithium business provides avenues for growth through the electric vehicle and battery storage markets. These growth markets, coupled with supply constraints buoying lithium prices, will power the firm’s business for decades.
Quick Take and Stock Performance
Albemarle is a leading supplier to the growing energy storage and electric vehicle markets through its lithium business. ALB also has exposure to solar through its Performance Catalyst Solutions business, which produces high-purity metal organics used in solar cell production. The same division supplies LED manufacturers (general lighting and displays). While these are the “in-demand” markets the company serves, the firm is a diversified specialty chemicals producer serving the petroleum refining, consumer electronics, plastics, lubricants, pharmaceuticals, crop protection, food-safety and custom chemistry markets. ALB’s diversified portfolio is a foundation from which the firm can power growth in these in-demand markets.
The company’s stock has handily outperformed the S&P since the start of 2016, returning 89% vs. 19%, respectively. The same performance carries over to the 2017 YTD subset, with ALB returning 23% against the S&P’s 8%. The recent stock performance is heavily driven by the company’s purchase of Rockwood Lithium in 2014; ALB’s lithium business grew EBITDA 56% YoY and contributed $37M to the $21M EBITDA growth YoY for the first quarter. For full-year 2016, the Lithium and Advanced Materials division grew both net sales and EBITDA 16%, while company wide net sales were down 5% and EBITDA virtually flat.
Recent Comments