Top Materials Stocks for January 2022

X, LYB, and AA are top for value, growth, and momentum, respectively

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 an exchange-traded fund (ETF)—the Materials Select Sector SPDR ETF (XLB)—have slightly underperformed the broader market. The XLB’s total return was 26.4% over the past 12 months, below the benchmark Russell 1000’s total return of 27.2%. These market performance numbers and all statistics in the tables below are as of Dec. 23, 2021.

Here are the top three materials stocks with the best value, the fastest 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 that you’re paying less for each dollar of profit generated.

Best Value Materials Stocks
  Price ($) Market Capitalization (Market Cap) ($B) 12-Month Trailing P/E Ratio
United States Steel Corp. (X) 23.15 6.3 2.1
Cleveland-Cliffs Inc. (CLF) 20.29 10.2 5.2
LyondellBasell Industries N.V. (LYB) 90.55 30.1 5.3

Source: YCharts

  • United States Steel Corp.: United States Steel Corp. is a leading steel producer with operations in the United States and central Europe. The company serves the construction, automotive, energy, appliance, containers, and packaging industries with high-value-added steel. On Dec. 16, 2021, United States Steel provided guidance for the fourth quarter (Q4) of 2021, projecting adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of roughly $1.65 billion. As of Dec. 16, 2021, the company had repurchased approximately $100 million of common stock during the quarter, which was part of the company’s $300 million stock buyback authorization.
  • Cleveland-Cliffs Inc.: Cleveland-Cliffs is a major North American flat-rolled steel producer and supplier of iron ore pellets. The company also supplies stainless steel tubing and other products. For Q3 2021, ended Sept. 30, 2021, Cleveland-Cliffs reported that net income grew to nearly $1.3 billion from $2 million in Q3 2020. Over the same period, revenue surged by more than 250%. Strong sales growth of steel products was a key driver of the company’s performance.
  • LyondellBasell Industries N.V.: LyondellBasell Industries is a chemical company. It manufactures plastics and chemicals used to make food packaging, home furnishings, automotive components, paints and coatings, and similar items.

Fastest-Growing Materials Stocks

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 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 figure or the other unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of more than 2,500% were excluded as outliers.

Fastest-Growing Materials Stocks
  Price ($) Market Cap ($B) EPS Growth (%) Revenue Growth (%)
LyondellBasell Industries N.V. (LYB) 90.55 30.1 1,490 87.4
Nucor Corp. (NUE) 114.30 32.7 1,060 109.3
Steel Dynamics Inc. (STLD) 61.65 12.2 931.9 118.3

Source: YCharts

  • LyondellBasell Industries N.V.: See above for company description.
  • Nucor Corp.: Nucor is a maker of carbon and alloy steel, steel deck, steel bearing products, cold finished steel, and other products. The company also is a broker of various types of metals.
  • Steel Dynamics Inc.: Steel Dynamics is a carbon-steel producer and metals recycler. The company offers products including flat-rolled steel sheet, structural beams, and engineered bar special-bar-quality. On Dec. 16, 2021, Steel Dynamics announced Q4 2021 earnings guidance in the range of $5.46 to $5.50 per diluted share, representing record quarterly performance. Q4 2020 earnings were $0.89 per diluted share. The company said Q4 2021 results were driven by robust steel demand, including strong orders in the nonresidential construction sector.

Materials Stocks with the Most Momentum

These are the materials stocks that had the highest total return over the past 12 months.

Materials Stocks with the Most Momentum
  Price ($) Market Cap ($B) 12-Month Trailing Total Return (%)
Alcoa Corp. (AA) 59.36 11.1 167.7
Nucor Corp. (NUE) 114.30 32.7 122.0
Olin Corp. (OLN) 56.67 9.0 120.7
Russell 1000 Index N/A N/A 27.2
Materials Select Sector SPDR ETF (XLB) N/A N/A 26.4

Source: YCharts

  • Alcoa Corp.: Alcoa is a leading producer of aluminum, bauxite, and alumina products. The company serves customers in the aluminum industry around the world. On Dec. 13, 2021, the company announced the closure of its Wenatchee Works aluminum smelter in Washington state. The move will cost $75 million in restructuring and related charges to decommission the smelter, which had an aluminum smelting capacity of 146,000 metric tons.
  • Nucor Corp.: See above for company description.
  • 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.

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  1. YCharts. “Financial Data.” Accessed Dec. 28, 2021.

  2. United States Steel. “United States Steel Corporation Provides Fourth Quarter 2021 Guidance and Business Updates.” Accessed Dec. 28, 2021.

  3. Cleveland-Cliffs. “Cleveland-Cliffs Reports Record Third-Quarter 2021 Results.” Accessed Dec. 28, 2021.

  4. LyondellBasell Industries. “Who We Are.” Accessed Dec. 28, 2021.

  5. Nucor. “Nucor Expects Record Quarterly Earnings in the Fourth Quarter of 2021.” Accessed Dec. 28, 2021.

  6. Steel Dynamics. “Steel Dynamics Provides Fourth Quarter 2021 Record Earnings Guidance.” Accessed Dec. 28, 2021.

  7. Alcoa. “Alcoa Announces Closure of Wenatchee Smelter in Washington State.” Accessed Dec. 28, 2021.

  8. Olin. “Learn About Olin.” Accessed Dec. 28, 2021.