Pilbara Minerals or Core Lithium shares: Which would I buy?

It's no secret that ASX lithium shares like Pilbara Minerals Ltd (ASX: PLS) and Core Lithium Ltd (ASX: CXO) have exploded in popularity over the past year or two on the ASX.

Investors are noticing that lithium is rapidly evolving into an essential industrial metal for the 21st century – being a key ingredient in the rechargeable batteries that will soon dominate our transportation system and the electrical grid. 

But just because a commodity is useful doesn't mean that the companies that mine it are automatic wealth generators. Many oil companies have given investors lousy returns over time, despite the fact that most of us still have to fill up our cars.

So today, let's look at two ASX lithium shares in Core Lithium and Pilbara Minerals, and see which one might be worth investing in.

Now, I have written before about my general lack of love towards lithium shares. I don't own any in my portfolio, and I don't expect to.

But that means I have missed out on some impressive gains.

Over the past 12 months, the Pilbara share price has risen by 42.8%. And over the past 2 years or so, investors have enjoyed a whopping 250% gain:

Core Lithium's short-term performance hasn't been quite as impressive. Over the past year, this ASX lithium share has lost 14% of its value. But over two years, investors have still enjoyed gains of 290% or thereabouts:

So both shares have been impressive performers and wealth generators for investors over recent years.

But if someone forced me to choose between investing in Pilbara Minerals and Core Lithium, how would I pick the winner?

Well, it would start and end with the fundamentals.

So let's compare the recent half-year earnings reports that these two companies have recently released.

Pilbara vs. Core Lithium shares: Which would I choose?

Starting with Pilbara, this lithium share revealed its numbers for the six months to 31 December on 23 February last month.

As we covered at the time, this saw Pilbara report $2.18 billion in revenues, up 305% from the previous year's report. This helped boost the company's statutory net profit after tax (NPAT) to $1.24 billion, up an extraordinary 989%.

As a result, Pilbara was able to declare its first-ever dividend payment – an inaugural dividend of 11 cents per share, fully franked. 

Let's see how that compares to Core Lithium.

So Core reported its own earnings earlier this month, on 9 March.

But it was a bit of a different picture. Firstly, Core Lithium made a loss of $9.2 million for the period. That was up from the loss of $3.3 million over the prior corresponding half.

That translated into an earnings per share (EPS) loss of 0.52 cents per share, up from the prior loss of 0.22 cents. Unsurprisingly, no dividend was declared here.

Now, it's important to note that these results don't include Core Lithium's first sale of lithium from its Finiss project, which will be booked in the second half of FY2023.

But they do show that Core lithium and Pilbara share about as similar as chalk and cheese when it comes to business maturity.

So thanks to Pilbara's healthy profitability and dividend-paying status, I would choose to invest in Pilbara shares over Core Lithium any day if I had to pick.

I like investing in companies that make money. And while Core Lithium might get to the same level of profitability as Pilbara in a few years, it's not something I would be prepared to bet my capital on right now.