It's no secret that many Aussie investors love S&P/ASX 200 Index (ASX: XJO) lithium shares, and there are plenty to choose from. Two apparent favourites are Pilbara Minerals Ltd (ASX: PLS) and Core Lithium Ltd (ASX: CXO). But while they work in the same field, the pair are vastly different.
So, how do the shares differ and which is the better ASX 200 lithium buy? Let's take a look.
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Pilbara Minerals
Looking back, Pilbara Minerals shares have been an ASX growth story, through and through. This time 10 years ago, they were trading for just 2 cents each. Today, the Pilbara Mineral share price is $4.70 – marking a huge 23,400% gain in that time.
The company currently boasts a market capitalisation of around $14 billion, sits on the S&P/ASX 50 Index (ASX: XFL), and holds the Pilgangoora project – said to be the world's largest independent hard-rock lithium production.
Not to mention, it recently posted its maiden profit. Pilbara Minerals shipped 361,305 dry metric tonnes of spodumene concentrate last financial year, bringing in $1.2 billion of revenue and leaving it $561.8 million in the green.
Core Lithium is a different beast entirely.
Core Lithium
Unlike Pilbara Minerals, Core Lithium has a long way to go before it can call itself a profitable ASX 200 share.
The company is developing its flagship Finniss Lithium Project. It's expected to produce its first spodumene concentrate this half – just months after its first revenue event.
Thus, there's likely a while to wait before the $2 billion lithium hopeful turns a profit.
Though, its share price has gained around 1,400% over the last decade to trade at $1.07 today.
Are Pilbara Minerals shares a better buy than Core Lithium's?
With all that in mind, comparing shares in Pilbara Minerals and Core Lithium is a lot like comparing apples to oranges.
Personally, I think the decision could come down to risk tolerance. Unprofitable outfits typically carry more risk than their profitable peers. Though, greater risks generally bring greater potential rewards.
It's also worth noting that materials stocks generally don't have much control over their earnings. Instead, they're at the mercy of commodity prices.
For instance, the higher the price of lithium, the more the producers could rake in, and vice versa.
Demand for the battery-making material has pushed its value sky-high lately. However, with more supply coming online, top broker Goldman Sachs is tipping lithium prices to fall in the coming years.
Thus, I think Pilbara Minerals shares could prove a better buy for investors wishing to take advantage of current high lithium prices.
Finally, passive income investors might prefer the look of Pilbara Minerals shares, with Macquarie tipping the company to pay its first dividend this fiscal year.
