Can ALB's Cash Strength Fuel Greater Shareholder Returns Ahead?

Albemarle Corporation ALB remains committed to driving shareholder value by leveraging solid liquidity and healthy cash flows. At the end of 2025, ALB had liquidity of around $3.2 billion, including cash and cash equivalents of around $1.6 billion. Its operating cash flow was around $1.3 billion in 2025, up roughly 86% from the prior-year period. 

ALB generated free cash flow of $692 million for full-year 2025, driven by strong cash conversion, lower capital spending and productivity measures. ALB expects to generate meaningful free cash flow in 2026. Free cash flow is expected to be driven by the recent uptick in lithium prices, strong cash conversion and productivity. Its ability to convert improving operating performance into free cash is likely to result in incremental returns to shareholders. 

The company remains focused on maintaining its dividend payout. It has raised its quarterly dividend for 30 consecutive years. ALB offers a dividend yield of 0.8% at the current stock price. Backed by healthy cash flows and sound financial health, the company's dividend is perceived to be safe and reliable.

Among its peers, Sociedad Quimica y Minera de Chile S.A. SQM exited the third quarter with strong liquidity, cash and cash equivalents being around $1.5 billion. Sociedad Quimica’s solid cash position supports its capital investment in growth projects and shareholder-friendly actions. Sociedad Quimica projects total capital expenditure of $2.7 billion for the 2025–2027 period, which includes the expansion of lithium carbonate and lithium hydroxide capacity in Chile, the expansion of the Mt. Holland project and investments to develop the Andover project, both in Australia. 

ICL Group Ltd. ICL ended 2025 with cash and cash equivalents, and short-term investments and deposits of $496 million. ICL Group also had roughly $1.1 billion of unused credit facilities. It generated an operating cash flow of $1,056 million in 2025. ICL group distributed roughly $224 million in dividends to its shareholders last year.

ALB’s Price Performance, Valuation & Estimates

Albemarle has gained 110.4% in the past six months compared with the Zacks Chemical - Diversified industry’s rise of 1.9%.

ALB is currently trading at a forward price-to-sales ratio of 3.99, above the industry. It carries a Value Score of D.

The Zacks Consensus Estimate for ALB’s 2026 earnings implies a year-over-year rise of 984.8%. The EPS estimates for 2026 have been trending higher over the past 60 days.

ALB stock currently carries a Zacks Rank #1 (Strong Buy). 

You can see the complete list of today’s Zacks #1 Rank stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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