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Albemarle Corp ALB

Morningstar Rating
$133.20 −9.60 (6.72%)
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Company Report

Albemarle: Stock Plummets on Convertible Preferred Share Issuance

Albemarle announced a proposed public offering of depository shares, with each share representing one twentieth of a mandatory convertible preferred share that will convert to common equity. The total offering size is a little over $2 billion, including a share grant to the underwriters. The company plans to use the proceeds to help fund capital expenditures and repay short-term debt. This was unexpected news, as we view Albemarle's balance sheet as healthy, with a 1.1 times net debt/ adjusted EBITDA ratio at the end of 2023.

Price vs Fair Value

ALB is trading at a 56% discount.
Price
$133.20
Fair Value
$765.00
Uncertainty
High
1-Star Price
$196.00
5-Star Price
$883.00
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Albemarle has top-tier lithium assets through its brine operations in Chile and spodumene hard-rock operations in Western Australia, which are among the lowest-cost sources of lithium production globally.

Bears

Lithium prices will fall if new supply comes online faster than demand, which will weigh on profitability. Albemarle's plans to increase its lithium production capacity will prove value-destructive in the wake of lower prices.

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News

Trading Information

Previous Close Price
$142.80
Day Range
$133.12140.22
52-Week Range
$108.39263.25
Bid/Ask
$123.10 / $123.54
Market Cap
$15.64 Bil
Volume/Avg
4.2 Mil / 3.2 Mil

Key Statistics

Price/Earnings (Normalized)
5.99
Price/Sales
1.63
Dividend Yield (Trailing)
1.20%
Dividend Yield (Forward)
1.20%
Total Yield
1.20%

Company Profile

Albemarle is one of the world's largest lithium producers. In the lithium industry, the majority of demand comes from batteries, where lithium is used as the energy storage material, particularly in electric vehicles. Albemarle is a fully integrated lithium producer. Its upstream resources include salt brine deposits in Chile and the U.S. and two hard rock mines in Australia, both of which are joint ventures. The company operates lithium refining plants in Chile, the U.S., Australia, and China. Albemarle is a global leader in the production of bromine, used in flame retardants. It is also a major producer of oil refining catalysts.
Sector
Basic Materials
Industry
Specialty Chemicals
Stock Style Box
Mid Core
Total Number of Employees
9,000

Competitors

Valuation

Metric
ALB
SQM
LAAC
Price/Earnings (Normalized)
5.996.88
Price/Book Value
1.662.490.62
Price/Sales
1.631.84
Price/Cash Flow
5.52
Price/Earnings
ALB
SQM
LAAC

Financial Strength

Metric
ALB
SQM
LAAC
Quick Ratio
0.771.683.09
Current Ratio
1.472.5012.43
Interest Coverage
2.7122.44−1.85
Quick Ratio
ALB
SQM
LAAC

Profitability

Metric
ALB
SQM
LAAC
Return on Assets (Normalized)
14.67%18.60%−5.06%
Return on Equity (Normalized)
28.28%39.48%−6.30%
Return on Invested Capital (Normalized)
20.38%23.58%−7.47%
Return on Assets
ALB
SQM
LAAC
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Name
Morningstar Rating for Stocks
Economic Moat
Market Cap
LIN
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SHW
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ECL
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APD
Air Products & Chemicals IncGmrpdqn$53.0 Bil
LYB
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PPG
PPG Industries IncTpzkmfy$32.8 Bil
DD
DuPont de Nemours IncJdrnkd$29.1 Bil
IFF
International Flavors & Fragrances IncHjkj$19.4 Bil
SQM
Sociedad Quimica Y Minera De Chile SA ADRYrbhjw$13.6 Bil

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