Got $200? 2 Lithium Stocks to Buy and Hold Forever

Lithium stocks may not be in the headlines like chip stocks, but they have just as much growth potential over the next decade.

Amy Legate-Wolfe

Author Bio Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Her work can also be found at Canada's National Observer, where she writes on the business side of climate action. Before joining Motley Fool Canada, Amy wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband. Social Media Follow Amy on LinkedIn and Canada Stock Digest. Favorite Investment Quote “October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published February 22, 2024 4:40 pm EST

There has been a lot of discussion over chip stocks this last year. And clearly that’s definitely an area where investors should have some of their interest. But it’s not the only area. Lithium stocks are certainly another place where investors should start to turn their attention — especially as they almost all offer value these days.

As well, the lithium market is expected to surge over the next decade. There continues to be heavy demand for lithium, especially with the increase in electric vehicle (EV) use for lithium-ion batteries. Lithium also remains the most efficient and cost-effective option for high-performance batteries. And that gives it a huge advantage.

So, with that in mind, there are three lithium stocks I would consider picking up now on the TSX today and holding them for at least the next decade.

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Lithium Americas

First off, Lithium Americas (TSX: LAC) is one of the top companies to consider among lithium stocks. The share price has skyrocketed over the last five years alone, fuelled by its lithium projects in Argentina and the Thacker Pass in Nevada. In fact, Thacker Pass has done so well that it’s becoming its own company! It is now one of the largest lithium deposits in North America.

The thing is, to look at Lithium Americas stock you’d think it was underperforming. However, the company recently split, and that has affected the history of its share price. In the last five years, shares have quadrupled in price. And that’s likely to only continue further.

The benefit it has among lithium stocks is a diversified portfolio with projects in both Argentina and the United States. It also recently secured a US$2 billion investment from General Motors, solidifying its financial position. So, yes, shares are down for now, but there is likely to be a huge turnaround for this company over the next decade.

Avalon Advanced Materials

Now, certainly, Lithium Americas stock is the one we always think of when talking about lithium stocks. But perhaps another lesser-known company is Avalon Advanced Materials (TSX: AVL). This company has a penny-stock status. But that means you can take a small stake and hold it for huge growth over the next decade.

Meanwhile, Avalon stock has seen its shares rise 700% in the last five years. It also offers more exposure in Argentina and the United States with its Separation Rapids project in Ontario. This is now touted as one of the most advanced lithium projects in Canada, with a clear path to production.

What’s more, Avalon stock also has secured partnerships with established lithium companies as well. So, while it’s a smaller company than Lithium Americas stock, I wouldn’t count it out. What’s more, it offers you more exposure throughout North America if you pick it up with Lithium Americas stock as well.

Bottom line

Lithium stocks are going to be around for the foreseeable future. While they don’t have the headlines of chipmaking companies, they’re going to prove incredibly important over the next decade. What’s more, they’re super cheap. So, even a small stake could offer huge returns. And if you need a deal in this downturn, then these are the companies to consider.