Battery stocks have come into focus as the industry segment has been growing at a rapid clip, and demand is only rising as they become increasingly popular in electric vehicles, cloud computing, charging devices, and other sectors.
Energy research firm Wood Mackenzie earlier this month noted that battery storage is fundamental to “a radical energy transition” that is now underway, “driven by environmental, policy and technology factors.” The EV sector, in particular, has been perhaps the biggest growth driver for battery stocks, with the market expected to be worth over $192 billion by 2030. Hence, battery stocks can easily become one of the most lucrative investment options as we progress toward a fully “renewable” economy.
Finding battery stocks that pay dividends can be an uphill climb. Technology companies are notorious for not paying dividends as they reinvest whatever earnings they generate into the company. Moreover, a vast majority of them are still chalking out their path to profitability. Therefore, it’s virtually impossible for these companies to milk dividends from their cash flows.
However, after careful deliberation, here’s a list of some of the top battery stocks which happen to pay dividends.
Both Albemarle and EnerSys are among the top 20 holdings in the new WisdomTree Battery Value Chain and Innovation Fund (BATS:WBAT). ENS (3.41%) is the fourth-largest among the 89 stocks in the exchange-traded fund’s portfolio, while ALB (2.02%) is 17th.
Battery Stocks To Buy: Albemarle (ALB)
Albemarle is a material and specialty chemicals specialist based out of North Carolina.With a focus on EV-related materials and lithium, the company intends to significantly expand its output to cater to the rising demand for its products.
Lithium demand will continue driving its business to new heights. It recently bumped its forecast for the lithium market by an incredible 30%. Consequently, it also increases its conversion capacity to meet the accelerating demand.
Considering the supply chain constrictions, the company’s performance has been relatively impressive. It recently posted a healthy earnings beat which points to a better time as we advance. More importantly, its dividend profile is attractive considering its safety and consistency. Also, it recently increased its quarterly dividend by 1% to 39.5 cents.
FMC Corp (FMC)
FMC is one of the top agrochemical companies globally, boasting a spectacular profitability profile. FMC had separated its battery business back in 2018 into a publicly traded company called Livent Corporation.
Livent is a fully integrated lithium manufacturer with a vast portfolio of products for EVs, energy storage applications, polymers, and specialty uses. For the past several quarters, the company has been an incredible performer, and its operations show consistent profits and cash flow yields.
Being a one-stop shop for lithium enables the company to tap into private markets and command higher pricing. Therefore, its profitability is firmly in the green, and the business has arguably the biggest upside for any lithium investment.
FMC stock has performed well over six months, with over a 30% return. Furthermore, its dividend profile is impressive, with a 1.7% forward yield and growth rates in excess of 28%. Hence, it’s one of the most attractive investments in its sector.
Battery Stocks to Buy: EnerSys (ENS)
EnerSys is the leading industrial battery manufacturer globally. It delivers its solution to various sectors, including aerospace, transport, medical devices, telecommunications, and others. Additionally, it has incredible growth opportunities in 5G and the EV realm.
The company has performed decently in terms of financials and will be looking to push the pace in the coming years. Also, its acquisitions are expanding its revenue base, and the benefits of its merger and acquisition activities should bear fruit for years to come.
Enersys planned to expand its revenue growth by 50% over four years. Moreover, it expects to significantly expand its cash flows which should feed its dividend profile. Though its dividend yield is lower than 1%, it has a solid foundation to take it to the next level.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
