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. Some prominent names include DuPont de Nemours Inc. (DD), Dow Inc. (DOW), and Vulcan Materials Co. (VMC). Materials stocks, as represented by the Materials Select Sector SPDR ETF (XLB), have underperformed the broader market, providing investors with a total return of 5.1% compared to the S&P 500's total return of 12.2% over the past 12 months. These market performance numbers and the statistics in the tables below are as of July 21.
Here are the top 3 materials stocks with the best value, the fastest earnings growth, and the most momentum.
Best Value Materials Stocks
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|
|LyondellBasell Industries N.V. (LYB)||66.80||22.3||8.5|
|Eastman Chemical Co. (EMN)||74.99||10.2||12.8|
|CF Industries Holdings Inc. (CF)||29.16||6.2||13.7|
- LyondellBasell Industries N.V.: LyondellBasell is a chemical company based in the Netherlands that refines and produces plastic resins and other chemicals. These are used in the manufacturing of lightweight plastics, construction materials, automotive components, durable textiles, and bio fuels. On May 29, the company announced a quarterly dividend of $1.05 per share, paid on June 15.
- Eastman Chemical Co.: Eastman Chemical produces industrial chemicals, fibers, plastics, and additives used in a wide range of industries.
- CF Industries Holdings Inc.: CF Industries is a maker and supplier of nitrogen and phosphate fertilizer products distributed globally. On May 6, in its Q1 2020 earnings report ending March, the company said that it produced the second-highest quarterly gross volume of ammonia in its history. C.F. Industries said that, thus far, it had "not experienced pandemic-related disruptions" to its operations.
Fastest Growing Materials Stocks
These are the materials stocks with the highest year-over-year (YOY) earnings per share (EPS) growth for the most recent quarter. Rising earnings show that a company’s business is growing and is generating more money that it can reinvest or return to shareholders.
|Fastest Growing Materials Stocks|
|Price ($)||Market Cap ($B)||EPS Growth (%)|
|Newmont Corp. (NEM)||64.19||51.5||537.5|
|Corteva Inc. (CTVA)||27.72||20.7||64.6|
|Sherwin-Williams Co. (SHW)||608.08||55.2||32.1|
- Newmont Corp.: Newmont acquires and develops mineral properties. The company produces primarily gold, but also silver, copper, zinc, and lead.
- Corteva Inc.: Corteva is a provider of agricultural products, including seeds and crop protection products, as well as software solutions and digital services. On June 30, the company announced it had acquired full ownership of PhytoGen Seed Co. LLC. Corteva previously owned 53.5% of the company, and purchased the remaining stake from joint venture partner J.G. Boswell Co. PhytoGen sells to customers in the U.S. cottonseed industry.
- Sherwin-Williams Co.: Sherwin-Williams develops, manufactures, and distributes paint, coatings, and related products. The company sells its products to professional, industrial, commercial, and retail customers. On June 22, the company raised its net sales guidance for Q2 2020, saying that it expected a decline in the mid-single-digit percentage range. Sherwin-Williams previously said it expected a steeper, double-digit decline in the low-to-mid-teens percentage range.
Materials Stocks with the Most Momentum
These are the materials stocks that had the highest total return over the last 12 months.
|Materials Stocks with the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|Newmont Corp. (NEM)||64.19||51.5||65.7|
|Sherwin-Williams Co. (SHW)||608.08||55.2||34.4|
|Air Products & Chemicals Inc. (APD)||290.87||64.2||32.5|
|Materials Select Sector SPDR ETF (XLB)||N/A||N/A||5.1|
- Newmont Corp.: See above for company description.
- Sherwin-Williams Co.: See above for company description.
- Air Products & Chemicals Inc.: Air Products & Chemicals produces a range of industrial gases and related products such as surfactants, resins, and epoxy curatives used across the beverage, health, and semiconductor fields. On July 16, the company declared a quarterly dividend of $1.34 per share of common stock, payable on November 9, 2020.
YCharts. "Financial Data," Accessed July 21, 2020.
LyondellBasell Industries NV. "LyondellBasell Announces Quarterly Dividend," Accessed July 21, 2020.
CF Industries Holdings, Inc. "CF Industries Holdings, Inc. Reports First Quarter 2020 Earnings Results." Accessed July 21, 2020.
Corteva, Inc. "Corteva Agriscience Acquires Full Ownership of PhytoGen Seed Company, LLC Joint Venture." Accessed July 21, 2020.
Sherwin-Williams Co. "Sherwin-Williams Increases Second Quarter 2020 Sales Guidance." Accessed July 21, 2020.
Air Products & Chemicals, Inc. "Air Products Declares Quarterly Dividend." Accessed July 21, 2020.