The materials sector includes companies engaged in the discovery, development, and processing of raw materials, which are used across a broad range of sectors and industries. Materials stocks include manufacturers of products as varied as plastic, fertilizer, paper, concrete, and metals. Prominent names include Ecolab Inc. (ECL), Air Products and Chemicals Inc. (APD), and DuPont de Nemours Inc. (DD).
Materials stocks, represented by the Materials Select Sector SPDR ETF (XLB), have nearly matched the performance of the broader market. The XLB's total return was 38.7% over the past 12 months, marginally ahead of the Russell 1000's total return of 38.6%. These market performance numbers and all statistics in the tables below are as of July 15, 2021.
Here are the top 3 materials stocks with the best value, the fastest growth, and the most momentum.
These are the materials stocks with the lowest 12-month trailing price-to-earnings (P/E) ratio. Because profits can be returned to shareholders in the form of dividends and buybacks, a low P/E ratio shows you’re paying less for each dollar of profit generated.
|Best Value Materials Stocks|
|Price ($)||Market Cap ($B)||12-Month Trailing P/E Ratio|
|Celanese Corp. (CE)||155.96||17.6||8.7|
|The Mosaic Co. (MOS)||30.53||11.6||11.4|
|NewMarket Corp. (NEU)||307.60||3.4||13.2|
- Celanese Corp.: Celanese is a global producer of chemicals and advanced materials. It produces acetyl, acetate, vinyl emulsion, and engineered polymers. On July 14, Celanese declared a cash dividend of $0.68 per share, payable Aug. 9 to shareholders of record as of July 26, 2021.
- The Mosaic Co.: The Mosaic Co. is a producer and distributor of crop nutrient products. The company provides feed ingredients, concentrated phosphates, potash, and related products to the agricultural industry worldwide.
- NewMarket Corp.: NewMarket develops, manufactures, and blends fuel and lubricant additives. The company supplies its products to refiners and other companies that sell petroleum products. Its products are used in transportation and industrial equipment.
These are the top materials stocks as ranked by a growth model that scores companies based on a 50/50 weighting of their most recent quarterly year-over-year (YOY) percentage revenue growth and their most recent quarterly YOY earnings-per-share (EPS) growth. Both sales and earnings are critical factors in the success of a company. Therefore ranking companies by only one growth metric makes a ranking susceptible to the accounting anomalies of that quarter (such as changes in tax law or restructuring costs) that may make one or the other figure unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of over 2,500% were excluded as outliers.
|Fastest Growing Materials Stocks|
|Price ($)||Market Cap ($B)||EPS Growth (%)||Revenue Growth (%)|
|Element Solutions Inc. (ESI)||23.61||5.8||1,000||21.5|
|Southern Copper Corp. (SCCO)||63.96||49.5||253.6||47.3|
|LyondellBasell Industries NV (LYB)||101.00||33.8||657.1||21.2|
- Element Solutions Inc.: Element Solutions is a global specialty chemicals company. It makes and supplies chemical products used in consumer electronics, communication infrastructure, automobiles, industrial surface finishing, consumer packaging, offshore oil production and drilling, and more. In June, Element Solutions announced its planned acquisition of surface finishing chemicals company Coventya Holding SAS. Per the agreement, Element will pay roughly €420 million ($495.7 million) in cash. The transaction is expected to close late in 2021.
- Southern Copper Corp.: Southern Copper explores, develops, and produces copper. In the process, the company also produces several by-products including molybdenum, silver, zinc, sulfuric acid, and other metals. It conducts mining operations in Peru and Mexico.
- LyondellBasell Industries NV: LyondellBasell Industries makes petrochemical products that are used in a wide range of industries, including in the manufacturing of personal care products, lightweight plastics, food packaging, automotive components, for medical applications, biofuels, and more. In June, LyondellBasell announced that it had acquired Malaysia-based PolyPacific Polymers Sdn. Bhd. The company produces reinforced and modified polyolefin compounds. The company will undergo a rebranding and name change, with employees becoming LyondellBasell employees. Terms of the deal were not disclosed. The value of the transaction was not mentioned in the press release.
These are the materials stocks that had the highest total return over the last 12 months.
|Materials Stocks with the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|Cleveland-Cliffs Inc. (CLF)||21.62||10.8||259.1|
|Olin Corp. (OLN)||42.90||6.8||254.3|
|United States Steel Corp. (X)||23.20||6.3||189.2|
|Materials Select Sector SPDR ETF (XLB)||N/A||N/A||38.7|
- Cleveland-Cliffs Inc.: Cleveland-Cliffs is a major North American flat-rolled steel producer and major supplier of iron ore pellets.
- Olin Corp.: Olin manufactures and distributes chemical products, such as chlorine and caustic soda, vinyls, epoxies, chlorinated organics, bleach, and hydrochloric acid. It also makes sporting ammunition and small caliber military ammunition. On July 1, the company announced that it had entered an agreement with chemical manufacturer ASHTA Chemicals Inc. to purchase and sell the chlorine produced at ASHTA's Ashtabula, Ohio facility. The deal is expected to optimize logistics and reduce costs for both companies.
- United States Steel Corp.: United States Steel is an integrated steel producer which makes a variety of steel products at facilities in North America and Europe. The company serves clients in the automotive, container, industrial, construction, oil and gas, and appliance industries. The company on June 17 released guidance for Q2 2021, including expected adjusted EBITDA of $1.2 billion, which is more than double that of Q1 2021. The increased guidance was driven by factors including high prices and strong demand.
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YCharts. "Financial Data." Accessed July 18, 2021.
Celanese Corp. "Celanese Corporation Declares Quarterly Dividend of $0.68 Per Share." Accessed July 18, 2021.
Element Solutions Inc. "Element Solutions Inc Announces Planned Acquisition of Coventya." Accessed July 18, 2021.
LyondellBasell Industries NV. "LyondellBasell announces acquisition of PolyPacific Polymers Sdn. Bhd. in Malaysia." Accessed July 18, 2021.
Olin Corp. "Olin Enters into Agreement with ASHTA to Purchase and Sell Chlorine," Page 1. Accessed July 18, 2021.
United States Steel Corp. "United States Steel Corporation Provides Second Quarter 2021 Guidance." Accessed July 18, 2021.