Better buy: SQM vs. Albemarle. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services.Sociedad Quimica y Minera de Chile, commonly known as SQM, is a Chilean-based chemical company that gets 43% of its gross profit from lithium, 24% from specialty plants and nutrition, 22% from iodine and derivatives, 8% from potassium, and 3% from industrial chemicals, according to the company's November corporate presentation. Specialty plant nutrition (SPN), potassium, and industrial chemicals were all down for the first nine months of 2019 versus the same period in 2018. SPN sales volumes were down 7% and prices were down 2%. EBITDA = earnings before interest, taxes, depreciation, and amortization. Investing Basics In fact, Albemarle grew year-over-year net sales and adjusted EBITDA in every single one of its business segments, including lithium. Cumulative Growth of a $10,000 Investment in Stock Advisor2 Lithium Stocks for 2020 @themotleyfool #stocks $SQM $ALB Retirement When he's not writing, Daniel can be seen floating down the bayou, taking it easy to the tune of sweet summer cicadas and hot humid air. (TMFpalomino2) Although diversified, SQM has amped up its lithium investments in recent years, starting in 2016 when lithium emerged to As a result of increased supply and wavering lithium demand, especially after China cut government subsidies on electric vehicles, SQM is in a bind, delaying a planned expansion in its Atacama salt flat until 2021. I would like to receive Nasdaq communications related to Products, Industry News and Events. Find the latest Sociedad Quimica y Minera S.A. (SQM) stock quote, history, news and other vital information to help you with your stock trading and investing. Still, Albemarle will have difficulty justifying expansion projects or aggressive sales goals when lithium prices are down around a third in the past year.For now, the consensus view on why the lithium market is strained is simply that electric vehicle production hasn't caught up with demand. Sociedad Quimica y Minera de Chile, commonly known as SQM, is a Chilean-based chemical company that gets 43% of … Also struggling is the world's largest lithium producer, Albemarle, which delayed "construction plans for about 125,000 tonnes of additional lithium processing capacity, part of a plan to be cash flow positive within two years," according to Reuters. Potassium sales prices went up 14%, but volumes were down 35%. The Ascent is The Motley Fool's new personal finance brand devoted to helping you live a richer life. The lithium market. To make matters worse, all but one of SQM's other businesses are struggling. However, we are -- and we will be dealing with the challenging market conditions for the next 12 months to 18 months.Unlike SQM, Albemarle relies on long-term contracts that insulate the company from short-term commodity price risk. In 2019, Daniel joined the Fool as a contract writer, targeting the energy and industrial sectors from his hometown in Houston. About Us Daniel began his Foolish journey posting on The Motley Fool discussion boards, hyped on caffeine and providing commentary on Starbucks, Target, and Apple through the lens of a teenager. The only silver lining was iodine, which benefited from a 19% increase in prices.Stock Advisor launched in February of 2002.
Yes! That said, Albemarle appears to be in a better position to handle this market due to the strength of its other core business segments.Data source: Albemarle Q3 2019 results. The company positively notes that "year-over-year lithium prices [are] down about 30%, and Albemarle has been flat to up slightly on our year-over-year comparisons each quarter on lithium pricing." It offers a very strong future growth opportunity and the long-term secular growth trends remain fully intact. Let's conquer your financial goals together...faster. In contrast, SQM suffered a 26% decrease in lithium and derivative revenues in Q3 2019 compared to Q3 2018.
Like SQM, Albemarle has other specialty chemical businesses, including bromine specialties, catalysts, and fine chemical services.As you know the lithium market is dynamic. See you at the top! Returns as of 09/02/2020. Stock Market Personal Finance