Albemarle Corporation (ALB), a leading lithium producer, controls approximately 15% to 17% of the global lithium supply, crucial for electric vehicle (EV) batteries, smartphones, and other rechargeable devices. As global EV sales have surged tenfold since 2018, increasing from 2 million to 20 million units in 2023, demand for lithium is anticipated to double by 2030.
Despite a significant decline in lithium prices—dropping over 80% from late 2022 to early 2024—Albemarle maintained its dividend growth for thirty-one consecutive years. The company generated $692 million in free cash flow in 2025, even amidst market challenges, maintaining a payout ratio of 46% of free cash flow.
Goldman Sachs predicts rising lithium prices through 2028, as demand continues to outstrip supply. Each EV battery requires 8 kilograms of lithium, alongside additional needs from the energy grid, highlighting the long-term potential for companies like Albemarle amid evolving market dynamics.
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