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Tickers in this Article: OLN, SSL, RPM, MXI, SPY
The basic materials sector has been one of the better performing groups this year, and the trio of stocks we've highlighted below may be the best of the bunch. While the S&P 500, as represented by its proxy fund, the SPDR S&P 500 ETF (NYSE:SPY), is up a little more than 5% in 2010, the stocks listed below have done considerably better. Here they are, with some important fundamental information appended - perhaps most importantly, their 10-year EPS growth records.

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Explosive Movements
Olin Corporation (NYSE:OLN) operates in two separate business fields: bullets and a range of chemical products, including chlorine, caustic soda and bleach products, to name a few. Olin's ammunition division operates under the well-known Winchester label and produces both bullets and related gun reloading components and cartridges.

Year-to-date, the company's shares have climbed by 15%, and for the latest 12-month period they're higher by over 27%. That's a far cry better than the iShares S&P Global Materials Sector ETF (NYSE:MXI), a proxy for the broad materials group, which rose just 15% over the full-year period. Olin pays a solid 4% dividend and trades with a P/E of 17. For the last 10 years, the company has grown its EPS numbers at a rate of 16.5% per annum.

In its latest earnings report released this week, Olin shares plunged 10% in early trading, after profit numbers disappointed. The company reported quarterly net profit figures of 40 cents. Year-ago quarter numbers were 25% higher at 50 cents. Revenues were higher by close to 10% over last year's numbers, but it wasn't enough for traders, who sent a flood of sell orders against the company's shares when the opening bell struck. By half way through the trading day, Olin shares regained about half those losses.

Spinning Chemicals
RPM International Inc. (NYSE:RPM) has grown earnings at a phenomenal 13.8% rate for the last 10 years. The company makes a wide variety of chemical products, including paints, rust coatings, sealants and adhesives. Currently, RPM shares trade with a P/E of 14.8 and offer a dividend yield of 4.2%. This is the 37th straight year that management has raised the annual payout for shareholders. RPM stock is up over 9% over the last year.

African Energy and Chemicals
Sasol Limited (NYSE:SSL) is a South Africa-based integrated energy and chemicals company with a 10 year record of growing EPS numbers at a 15.5% rate. Current yield on the stock is a very healthy 4.9%, while the P/E is a mere 12. YTD, Sasol stock has not disappointed, rising over 12%. This summer, the company guided analysts to expect between 12% and 20% growth over last year's numbers for the full year 2010.

The Bottom Line
Basic materials shares are strong, and the above named companies are delivering on all fundamental fronts. And with long-term EPS track records like these, it's hard to figure why not to buy. (For more, see Sector Rotation: The Essentials.)

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