Top Materials Stocks for March 2020

This article was originally published on this site

The materials sector includes companies engaged in the discovery, development, and processing of raw materials, which are used across many 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), Ecolab Inc. (ECL), and Dow Inc. (DOW). The materials sector, as measured by the Materials Select Sector SPDR ETF (XLB), underperformed the S&P 500 by a wide margin in the last 12 months. XLB posted a 12-month trailing total return of 5.4% versus the S&P’s 16.8% as of February 25, 2020.

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
LyondellBasell Industries NV (LYB) 79.65 26.6 8.3
Nucor Corp. (NUE) 47.29 14.3 11.4
Eastman Chemical Co. (EMN) 71.04 9.7 13.0
  • LyondellBasell Industries NV: LyondellBasell is 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.
  • Nucor Corp.: Nucor is a manufacturer of steel and steel products, including carbon and alloy steel, steel joints, steel deck, and metal building systems. For FY 2019, Nucor reported consolidated net earnings of $1.27 billion, down from $2.36 billion for the prior year.
  • Eastman Chemical Co.: In addition to industrial chemicals, the company produces fibers, plastics, and additives. Eastman Chemical reported earnings per diluted share of $0.19 for Q4 2019, down from $0.24 for Q4 2018.

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 Corp. (NEM) 50.26 40.6 18,360.0
International Flavors & Fragrances Inc. (IFF) 127.91 13.7 677.8
Sherwin-Williams Co. (SHW) 567.10 52.3 148.6
  • Newmont Corp.: Newmont operates gold mining facilities throughout North America and in Australia, Africa, and elsewhere around the world. Newmont saw revenue of $9.7 billion for 2019, up 34% YOY.
  • International Flavors & Fragrances Inc.: International Flavors & Fragrances creates and manufactures fragrance and flavor chemical formulations for personal care, food, beverage, and other industries.
  • 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. Sherwin-Williams recently announced a quarterly dividend of $1.34 per common share, an increase of 18.6% YOY.

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 (%)
Newmont Corp. (NEM) 50.26 40.6 43.5
Air Products & Chemicals Inc. (APD) 245.53 54.1 39.3
FMC Corp. (FMC) 102.40 13.3 36.1
S&P 500 N/A N/A 16.8
Materials Select Sector SPDR ETF (XLB) N/A N/A 5.4
  • Newmont Corp.: See above for company description.
  • Air Products & Chemicals Inc.: Air Products & Chemicals is a company engaged in the manufacture and distribution of atmospheric and specialty gases, as well as related products. The company provides oxygen, nitrogen, argon, helium, polyurethane, epoxy curatives, and resins.
  • FMC Corp.: FMC Corp. manufactures herbicides, insecticides, and other agricultural chemicals. The company serves customers around the world. In Q4 2019, FMC Corp. generated revenue of $1.2 billion, up 9% YOY.

Source: Investopedia

Powered by WPeMatico