Buffett Brain · Research note
Score updated 29 Oct 2026 · analysis from 24 Sept 2026
ALB· Materials
Albemarle
Albemarle's negative net margin and low ROIC signal weak economic fundamentals in the competitive chemicals sector.
Buffett fit
Weak fit
Owner
5
Durability
34
Management
58
Price
40
Score updated 29 Oct 2026 · analysis from 24 Sept 2026
Buffett's checklist
Each number against Buffett's bar, and where it ranks among Materials stocks in our database.
How much profit the business makes on each dollar invested in it. Higher is better.
What is left of each sale after the cost of making the product. A high number often means pricing power.
The cash the business earns for its owners, compared with the price of the whole company.
How fast sales grew each year over the last five years.
How many years of today's profit you pay for at today's price. Lower means cheaper.
How much the company owes compared with what it owns outright. Lower is safer.
The four pillars
How the business measures up on each of Buffett's four tests.
Owning 100% of Albemarle would involve navigating a challenging market with low of 2.24% and a negative net margin of -4.24%.
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Albemarle's long-term durability is questionable, given its low of 4.83% over 5 years and negative net margin.
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Management has not effectively compounded shareholder value, with a market cap increase vs retained earnings ratio of 1.97 and a dividend CAGR of -12.29%.
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The current valuation appears stretched, with an EV/ of 235.3 and a negative earnings yield of -1.1%.
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- The full reasoning behind all four pillars
- The 5-year price target and the return it implies
- What would change the call
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For and against
The strongest points on each side, with the numbers behind them.
In its favor
5- 1Revenue CAGR of 11.49% indicates growth potential in the lithium market.
- 2Current ratio of 2.07 suggests short-term financial stability.
- 3Low debt/equity ratio of 0.19 indicates conservative .
- 4Net debt/EBITDA of 0.99 shows manageable debt levels.
Concerns
7- 1Negative net margin of -4.24% highlights profitability issues.
- 2 of 2.24% is significantly below the sector top-quintile cutoff of 12.6%.
- 3Interest coverage of 1.6 indicates potential difficulty in meeting interest obligations.
- 4 of -91.3 reflects current unprofitability and market skepticism.
Price history
$96.96-61.3%· 5-year return
Weekly closing prices. Touch or hover the line for a date.
The business
How the business works
Albemarle Corporation operates in the specialty chemicals industry, focusing on lithium, bromine, and catalysts. The Lithium segment serves the growing lithium battery market, while Bromine offers fire safety solutions and other chemicals. Despite a revenue CAGR of 11.49% over 5 years, the company's net margin is negative at -4.24%, indicating profitability challenges. Unit economics are strained, with at just 5.55%.
How this analysis has moved
The call has held across 6 reviews.
Sep 27, 2026 → Oct 28, 2026
What other investors would say
The same company, judged by three other documented playbooks.
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