Following the surge in oil prices as the Organization of the Petroleum Exporting Countries (OPEC) and non-member oil-producing nations – an alliance known as OPEC+ – the narrative for the most promising battery stocks to buy in April got even more enticing. With rising fuel prices affecting practically everybody, greater interest will focus on advanced energy solutions.
Certainly, electric vehicles play a significant role in fostering alternatives to fossil-fuel-supported transportation mechanisms. At the same time, battery stocks to buy undergird other technological innovations that offer relevancies toward renewable energy protocols.
Thus, the silver lining regarding the OPEC+ cuts is that it might galvanize the global community to lessen geopolitical dependencies. Below are compelling battery stocks to buy this month.
|CMT||Core Molding Technologies||$18.22|
Core Molding Technologies (CMT)
While the concept of battery stocks to buy invariably focuses on the platform itself, investors should note opportunities in the broader, ancillary space. Specifically, Core Molding Technologies (NYSEAMERICAN:CMT) may provide diversified exposure. Specializing in sheet molding compounds, Core Molding represents a vital cog of the global EV ecosystem.
Per its website, Core manufactures EV battery boxes or compartments/chambers designed to hold batteries. While it might seem mundane, it’s a powerfully relevant market idea. Notably, since the January opener, CMT gained 40% of its equity value. In the trailing year, it’s up nearly 75%.
Enticingly, the market prices CMT at a trailing multiple of 12.64. As a discount to earnings, Core ranks better than 61.2% of companies listed in the chemicals industry. In addition, CMT trades at 0.41 times sales, favorably below the sector median of 1.26 times. Plus, EF Hutton’s Chip Moore pegs CMT a buy. The expert forecasts shares hitting $19, which represents almost 4% upside potential.
LyondellBasell Industries (LYB)
A multinational chemical company based in the Netherlands, LyondellBasell Industries (NYSE:LYB) is the largest licensor of polyethylene and polypropylene technologies. Regarding the topic of battery stocks to buy, LyondellBasell features expertise in battery-related innovations that undergird EVs and hybrid vehicles. Perhaps not surprisingly, LYB gained more than 11% of equity value since the start of the new year.
Financially, LyondellBasell brings several positive attributes to the table. First, the company enjoys decent stability in the balance sheet, as evidenced by its Altman Z-Score of 3.15, reflecting modestly low bankruptcy risk. Second, LyondellBasell posts a three-year revenue growth rate of 16.1%, beating out 75.41% of rivals.
Most enticingly for value investors, the market prices LYB at a forward multiple of 10.19. As a discount to projected earnings, LyondellBasell ranks better than 73.42% of companies in the chemicals industry. To be fair, Wall Street analysts peg LYB only as a hold. Still, their average price target is $98.60, implying almost 6% upside from here.
Univar Solutions (UNVR)
A global chemical and ingredients distributor and provider of value-added services, Univar Solutions (NYSE:UNVR) might not seem like a natural addition to battery stocks to buy. However, as the underlying market expands, people must consider what to do with used-up batteries. Here, Univar entered into a partnership with another enterprise – which I’ll discuss later – to provide waste management solutions for lithium-ion batteries.
So no, it’s not a direct play. Nevertheless, UNVR is incredibly relevant, making it a worthwhile idea among battery stocks to buy. Moreover, the company enjoys decent financials. For example, its Altman Z-Score runs at 3.02, again demonstrating modestly low bankruptcy risk. Operationally, the company features a three-year book growth rate of 15.4%, above 70% of companies in the chemicals industry.
Also, the market prices UNVR at a forward multiple of 12.13. As a discount to earnings, Univer ranks better than 64.56% of its rivals. As with LyondellBasell above, analysts peg UNVR as a hold. That said, their average price target comes out to $37.45, implying almost 7% upside potential.
Cabot Corp (CBT)
Headquartered in Boston, Massachusetts, Cabot Corp (NYSE:CBT) is a specialty chemicals and performance materials company. According to its website, Cabot provides industry-leading additives which enable battery performance and safety. One of the top-performing battery stocks to buy this year, CBT gained 15% of equity value since the Jan. opener.
Not only that, CBT gained over 39% in the trailing five years, demonstrating long-term relevancies. Better yet, the company features enticing financials. For starters, its Altman Z-Score of 3.65 indicates low bankruptcy risk over the next two years. On the profitability front, Cabot’s net margin pings at 8.15%, above 60.29% of the industry.
Plus, the market prices CBT at a forward multiple of 11.57. As a discount to projected earnings, Cabot ranks better than 65.82% of sector peers. Finally, Wall Street analysts peg CBT as a unanimous strong buy. Their average price target stands at $95, implying nearly 26% upside potential.
Sociedad Quimica (SQM)
An oldie but a goodie in the realm of battery stocks to buy, Sociedad Quimica (NYSE:SQM) is a Chilean chemical firm. Primarily, it supplies plant nutrients, iodine, lithium, and industrial chemicals. Most notably per its public profile, SQM represents the world’s biggest lithium producer. Obviously, that status has significant implications for the global EV rollout, among other core applications.
Financially, SQM enjoys very attractive metrics. On the balance sheet, it’s difficult not to notice the enterprise’s Altman Z-Score of 5.76, indicating a very low bankruptcy risk. Operationally, the company features a three-year revenue growth rate of 81.3%. Also, its book growth rate during the same period pings at 36.4%.
Despite these blistering stats, SQM owns an objectively undervalued profile. Presently, the market prices shares at a forward multiple of 4.99. As a discount to projected earnings, SQM ranks better than 98.1% of sector peers. Lastly, analysts peg SQM as a consensus moderate buy. Their average price target stands at $104, implying over 38% upside potential.
Li-Cycle Holdings (LICY)
The partner to the aforementioned deal with Cabot Corp, Li-Cycle Holdings (NYSE:LICY) focuses on sustainable processes for the recovery of critical materials from all types of lithium-ion batteries. By reintroducing these elements from lithium batteries into the supply chain, Li-Cycle may help address resource shortages as global powers compete for supplies. Therefore, LICY ranks among the most significant battery stocks to buy.
Since the start of the year, LICY gained over 18% of its equity value, an impressive performance. In fairness, though, it lost 28% in the trailing one-year period. As well, investors will need to understand that Li-Cycle is an aspirational business. While it’s not pre-revenue, the amount it posts on the top line sometimes fails to exceed its cost of goods sold.
So, aside from a relatively cash-rich balance sheet, Li-Cycle prints plenty of red ink in terms of profitability. Nevertheless, covering analysts peg LICY as a consensus moderate buy. Their average price target stands at $8.14, implying almost 46% upside potential.
An American specialty chemicals manufacturing firm, Albemarle (NYSE:ALB) operates three divisions: lithium, bromine specialties, and catalysts. Per its public profile, as of 2020, Albemarle represented the largest provider of lithium for EV batteries in the world. Therefore, ALB easily ranks among the most relevant battery stocks to buy. Still, it hasn’t helped ALB this year, which dipped more than 2% since the start of Jan.
For those that can be patient with battery stocks to buy, Albemarle presents enticing financial metrics. For a start, the company features a decent balance sheet, with a debt-to-EBITDA ratio of 1.16. In contrast, the sector median value is 1.82. Operationally, Albemarle runs a three-year revenue growth rate of 22.6%, outclassing 86.2% of the field.
Also, the market prices ALB at a forward multiple of 7.29. As a discount to projected earnings, the company ranks better than 89.24% of its rivals. In closing, analysts peg ALB as a consensus moderate buy. Their average price target is $308.69, implying over 47% upside potential.
On the date of publication, Josh Enomoto 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.