The materials sector includes companies engaged in the discovery, development, and processing of raw materials, which are used across many other sectors and industries. Materials stocks include manufacturers of products as varied as plastic, fertilizer, paper, concrete, metals, and more. Some prominent names in the materials sector include Dupont de Nemours Inc. (DD), Ecolab Inc. (ECL), and Dow Inc. (DOW). The materials sector, as measured by the Materials Select Sector SPDR ETF (XLB), has underperformed the S&P 500 over the past year. XLB posted a 12-month trailing total return of 11.2% versus the S&P's 16.3% as of November 19.
Below, we'll examine the top three stocks in the materials sector for best value, fastest earnings growth, and most momentum.
Materials Stocks with the Best Value
Here are the materials stocks in the S&P 500 with the lowest 12-month trailing price-to-earnings (P/E) ratio in the sector. 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.
|Materials Stocks with the Best Value|
|Price ($)||Market Cap ($B)||12-Month Trailing P/E Ratio|
|Nucor Corp. (NUE)||55.46||16.8||9.5|
|LyondellBasell Industries NV (LYB)||94.92||31.7||9.9|
|Albemarle Corp. (ALB)||67.10||7.1||12.5|
- Nucor Corp.: Nucor is a manufacturer of steel and steel products, including carbon and alloy steel, steel joints, steel deck, steel grinding balls, steel bearing products, and metal building systems. The company announced in early September that current CEO John Ferriola would be retiring at the end of the year and be replaced by veteran executive Leo Topalian.
- LyondellBasell Industries NV: LyondellBasell is chemical company based in the Netherlands, engaging in the refinery and production of plastic resins and other chemicals. The company's products are used in the manufacturing of personal care products, fresh food packaging, lightweight plastics, construction materials, automotive components, durable textiles, medical applications, and biofuels.
- Albemarle Corp.: Albermarle is a producer of specialty chemicals, which are used in the production of consumer electronics, petroleum refining, utilities, packaging, construction, transportation, pharmaceuticals, crops, and food-safety, among other things.
Materials Stocks with the Fastest Earnings Growth
Here are the materials stocks in the S&P 500 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.
|Materials Stocks with the Fastest Earnings Growth|
|Price ($)||Market Cap ($B)||EPS Growth (%)|
|Newmont Goldcorp Corp. (NEM)||38.06||31.2||723.2|
|CF Industries Holdings Inc. (CF)||45.13||9.8||123.1|
|FMC Corp. (FMC)||96.96||12.6||83.2|
- Newmont Goldcorp Corp.: Newmont Goldcorp is a mining company primarily engaged in the exploration and production of gold, but also other minerals including copper, silver, zinc, and lead.
- CF Industries Holdings Inc.: CF Industries engages in the manufacture and distribution of nitrogen and phosphate fertilizer products worldwide.
- FMC Corp.: FMC is a diversified chemical company serving agricultural, consumer, and industrial markets. The company's products include herbicides, insecticides, harvest aids, and other crop chemicals used for a variety of agricultural products.
Materials Stocks with the Most Momentum
These are the materials stocks in the S&P 500 that had the greatest total return over the past 12 months.
|Materials Stocks with the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|Air Products & Chemicals Inc. (APD)||241.19||53.2||50.7|
|Sherwin-Williams Co. (SHW)||586.08||54.1||39.5|
|Martin Marietta Materials Inc. (MLM)||260.70||16.3||39.3|
|S&P 500 (SPX)||N/A||N/A||16.3|
|Materials Select Sector SPDR ETF (XLB)||N/A||N/A||11.2|
- Air Products & Chemicals Inc.: Air Products & Chemicals is a company engaged in the manufacture and distribution of atmospheric and specialty gases, as well as other related products. The company provides oxygen, nitrogen, argon, helium, polyurethane, epoxy curatives, and resins.
- 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.
- Martin Marietta Materials Inc.: Martin Marietta Materials provides aggregates for the construction industry, including crushed stone, sand, and gravel. The company also engages in the manufacture of magnesia-based products used in industrial, agricultural, and environmental applications. The company this month declared a regular quarterly cash dividend of $0.55 per share on all outstanding common stock beginning on December 31, 2019.