If you’re a value investor, you should Seriescoldeweytechcrunch consider purchasing shares of SQM stock. This low-cost lithium producer has a strong track record of earning profits and paying out dividends. It has a trailing dividend yield of around 6.3% and is likely to deliver significant growth in the future.
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The EV revolution is here and it’s driving demand for SQM’s products. With a growing number of governments investing billions in laying the foundations for long-term decarbonization, there’s no question that this stock will see continued growth and success in the years ahead.
Lithium is key to the production of electric vehicle batteries and SQM’s products have always been a staple in the EV industry. This company’s lithium mining and processing operations are ideally situated to take advantage of a rapidly growing market.
While SQM’s lithium prices have fallen recently, it still offers attractive value for investors. At current prices, this company sports a forward earnings multiple of only 7.4x. Moreover, its low cost structure provides it with the competitive advantage to grow profit margins and free cash flow at a healthy pace.
SQM’s lithium price decline has dragged its profitability down to the bottom line, but this is a temporary issue and will be resolved soon. The company is expected to continue expanding its lithium production.
As the demand for lithium rises, this company’s margins will benefit from the higher prices, which in turn will drive growth. As a result, SQM’s profits are forecast to increase significantly over the next several years.
Another positive factor is that SQM’s lithium mining operations are well-positioned to take advantage of increasing EV sales. This is because it has a strong presence in Chile and a history of producing high-quality lithium at a low cost.
It’s also important to note that SQM’s regulatory roadblocks have cleared in recent months, allowing the company to expand its operations and increase its production. This will help to further boost its profits and grow its share price.
Lastly, SQM’s lithium production is expected to ramp up over the next few years, and it will be crucial for this company to maintain a strong balance sheet and positive cash flow. This will allow SQM to remain a top lithium producer and keep its dividend on the rise.
SQM’s recent volatility has caused some investors to question its future as a growth play. However, the company’s incredibly low valuation makes it a potential candidate for a partial re-rating and a large gain in shares over time.
