With the world fighting to go green, battery stocks are becoming far more attractive. After all, batteries play an essential role in the world’s move to renewable energy. Also, the U.S. Department of Energy announced it would provide $3.5 billion to companies that produce batteries and the essential minerals used to make them.
“Officials see batteries as an important climate solution. The devices can power cars and store clean electricity made from solar panels or wind turbines. The idea is to use fewer fossil fuels for cars and power plants,” as noted by the Associated Press.
Therefore, with battery demand increasing, investors should consider these three battery stocks.
Albemarle (ALB)
Investors may want to use weakness as an opportunity with Albemarle (NYSE:ALB), which currently yields 1.27%.
First, the pullback is overkill at this point. Over the last few months, the lithium giant dropped from about $245 to $126 on lithium supply issues. However, with negativity firmly priced in, and growing demand for batteries and lithium, ALB should start to come back strong.
Next, ALB is ridiculously undervalued. It trades at just 8.5x forward earnings and at less than half of growth (PEG ratio is 0.45). Finally, analysts at Citi just raised their price target on ALB to $175 a share, with a buy rating. Plus, even with all of the negativity, the company has a plan in place for double-digit growth this year, which could include cuts to capital spending.
“The company projects global demand for lithium to 5x by 2030, driven by electric vehicle (EV) sales. EVs are the largest driver of demand for lithium as most EVs run on lithium-ion batteries,” as noted by Motley Fool contributor Neha Chamaria.
Microvast (MVST)
Microvast (NASDAQ:MVST) “designs, develops and manufactures battery components and systems primarily for electric commercial vehicles and utility-scale energy storage systems,” according to its public profile.
And, while its chart isn’t anything to write home about just yet, give it time. Fundamentally, good growth is apparent. For example, in its most recent quarter, the company saw revenue growth of about 117% year over year (YOY) to $80.1 million. Also, it achieved a record backlog of $678.7 million, which was up about 383% YOY.
“Microvast is ramping up production of its latest battery cell and scaling production of existing facilities that have the potential to generate over $1B in annual revenue,” as highlighted by TheFly.com.
Amplify Lithium & Battery Technology ETF (BATT)
Additionally, if you want to diversify, try Amplify Lithium & Battery Technology ETF (NYSEARCA:BATT). With an expense ratio of 0.59%, BATT invests in companies involved with battery storage, battery metals, materials and electric vehicles (EVs).
Notably, some of the top BATT holdings include Tesla (NASDAQ:TSLA), BYD (OTCMKTS:BYDDF), Panasonic Holdings (OTCMKTS:PCRFY), BHP Group (NYSE:BHP), Albemarle, and Ganfeng Lithium (OTCMKTS:GNENF).
On the date of publication, Ian Cooper did not hold (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.
