Better Buy: Sociedad Quimica y Minera vs. Albemarle
Sociedad Quimica y Minera (NYSE: SQM) and Albemarle (NYSE: ALB) both saw huge stock advances in 2016 and 2017 -- and they both fell back down to Earth in 2018 and 2019, and have been on the same trajectory so far in 2020. This roller coaster ride, which has seen both fall by more than 50% from their late-2017 peaks, is all about Wall Street's attitude toward lithium, a key industrial metal used in batteries. The thing is, these two companies are, indeed, similar in many ways, but there are some key differences. And the differences might lead you to pick one over the other.
Both Sociedad Quimica y Minera (SQM from here on out) and Albemarle are key providers of lithium to companies around the world. The metal is used to make the batteries that are put into electric vehicles and energy storage for renewable power. In 2016 and 2017 investors were big on the electrification-of-transportation story, and bid lithium prices higher. The stocks of these two companies, as you might expect, went along for the ride. But with lithium prices skyrocketing, lithium producers started to ramp up production. Eventually, supply outstripped demand, and lithium prices cratered. Wall Street moved on to a new hot story, and the shares of both SQM and Albemarle tanked.
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Source Fool.com