The Top 3 Graphite Stocks to Buy Now

Written By Mike Munno

Updated November 8, 2023

As demand for graphite continues to rise, investors are looking for the best graphite stocks to buy. Graphite has become an increasingly popular investment choice due to its use in lithium-ion batteries for electric vehicles and other applications.

Graphite is a layered material made up of stacked graphene layers. It is a soft, black, and flaky material that is normally used as a lubricant and in pencil lead. Due to the growth of the EV industry and graphite's critical role, however, it is in higher demand than ever. Below we list three companies considered to be the best graphite stocks to buy for investors who are looking to take advantage of this trend. 

Top 3 Graphite Stocks

The Top Graphite Stocks to Buy

  • Northern Graphite Corporation (TSX-V: NGC)
  • Mason Graphite Inc. (TSX-V: LLG)
  • NextSource Materials Inc. (TSX: NEXT)

Northern Graphite Corporation (TSX-V: NGC)

Northern Graphite Corporation is a Canadian-based company that focuses on developing mining projects. Its main focus right now is the Bissett Creek graphite deposit in Ontario. The deposit has a measured and indicated resource of 10.3 million tons grading 2.21% graphite. The company plans to begin construction this year.

Northern Graphite has a strong potential for growth since graphite demand is expected to increase rapidly due to the growth in electric vehicle production. The company's focus on developing a low-cost mine with minimal environmental impact also makes it an attractive option for investors who are interested in sustainability.

The best part?

Shares of this company are trading for less than $0.75 at the time of writing. Once the Bissett Creek project is fully operational, investors could see this share price soar much higher. 

Mason Graphite Inc. (TSX-V: LLG)

Mason Graphite Inc. is another Canadian-based company that is focused on developing its Lac Guéret graphite project in Quebec. The project has a proven and probable reserve of 7.6 million tons grading 27.1% graphite. Simply put, it is one of the highest-grade graphite deposits in the world.

Mason Graphite has the potential for significant growth. The company plans to become a leading producer of high-purity graphite for use in electric vehicle batteries and other applications.

Its location in Quebec, which has a strong mining culture and a supportive government, also makes it an attractive option for investors.

This company is also trading for less than $1. This tiny graphite stock could have a massive upside once the market picks up. 

NextSource Materials Inc. (TSX: NEXT)

NextSource Materials Inc. is a Canadian-based company that is focused on the development of its Molo graphite project in Madagascar. 

The project has a proven and probable reserve of 23.6 million tons grading 6.13% graphite. NextSource plans to begin production this year.

This modest company has significant potential for growth, as it plans to become a low-cost producer of high-quality flake graphite for use in electric vehicle batteries and other applications. 

The company's focus on sustainability and ethical mining practices also makes it an attractive option for investors who are interested in ESG factors. 

This company is also on the smaller side, with a market cap of just over $317 million and a share price hovering between $2 and $3. This gives investors a chance to receive a significant return on their investment.

NextSource also recently announced its global anode expansion strategy. It plans to construct multiple battery anode facilities (BAFs), which will be capable of producing commercial-scale graphite anode material for lithium-ion batteries that are used in EVs. 

The Growing Demand for Graphite in the Electric Vehicle Market

As the world shifts toward renewable energy and a reduction in carbon emissions, the demand for electric vehicles has skyrocketed. Electric vehicles rely on lithium-ion batteries, which are made up of a variety of metals and minerals, including graphite. 

Graphite is used as an anode material in lithium-ion batteries. As the demand for electric vehicles continues to rise, so too does the demand for graphite.

According to a report by Research and Markets, the global graphite market is expected to grow at a CAGR of 5.6% from 2021–2026.

This growth is largely due to the increasing demand for graphite in the EV market.

As more countries and companies commit to reducing their carbon emissions, the demand for electric vehicles is expected to continue to rise. As EV demand rises, so will the demand for graphite.

A Focus on Sustainability and Ethical Mining Practices

Investors are becoming more socially conscious. They are increasingly interested in companies that prioritize sustainability and ethical mining practices.

All three of the graphite companies highlighted in this editorial have made commitments to sustainability and ethical mining practices.

Northern Graphite Corporation, for example, has stated that it is committed to developing a low-cost mine with minimal environmental impact. The company has also committed to using water from a nearby lake instead of groundwater, which will help preserve local aquifers. 

Mason Graphite Inc. has also made commitments to sustainability, including the use of renewable energy sources and a focus on reducing greenhouse gas emissions. The company has also developed a biodiversity action plan to protect local flora and fauna.

NextSource Materials Inc. has committed to ethical mining practices, including transparency in its supply chain and the protection of human rights.

Investing in Graphite Stocks

Investing in graphite stocks can be a great way to take advantage of the growing demand for electric vehicles. It's important to do your research and choose companies that have strong potential for growth and a commitment to sustainability and ethical mining practices.

One way to evaluate graphite stocks is to look at the company's resource estimates, production plans, and growth potential. This is one of the major reasons we like the three companies listed above. 

Northern Graphite Corporation, for example, has a large resource estimate and plans to begin construction in 2023, which could lead to significant growth in the coming years.

Mason Graphite Inc. has one of the highest-grade graphite deposits in the world and plans to become a leading producer of high-purity graphite.

NextSource Materials Inc. has a significant reserve and plans to become a low-cost producer of high-quality flake graphite.

Another way to evaluate graphite stocks is to look at the company's financials and valuation. Investors should consider factors such as revenue growth, profit margins, and P/E ratios when evaluating a company's financial performance. It's also important to consider the company's market capitalization and valuation relative to its peers.

Cornering the Graphite Sector

As the demand for electric vehicles and other applications continues to rise, the demand for graphite is expected to increase rapidly. Forward-thinking investors could be rewarded handsomely as the sector continues to become more popular. 

Northern Graphite Corporation, Mason Graphite Inc., and NextSource Materials Inc. are three of the best graphite stocks to buy in 2023, with strong potential for growth and a commitment to sustainability and ethical mining practices.

Investors should consider factors such as the company's resource estimates, production plans, financials, and valuation before making a decision.

Investing in graphite stocks can be a risky venture, but with the right research and evaluation, it can also be a rewarding investment opportunity in the years to come.

If you are looking for a little more information on the graphite stocks space and want to dig a little deeper, Alex Koyfman — one of our Wealth Daily experts and the founder of Microcap Insider — has found a special play that he believes could outperform all three of the stocks mentioned above. To learn more about Alex's favorite graphite stock, simply click here.

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