Top Materials Stocks for September 2021

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CE, FCX, and OLN 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 the Materials Select Sector SPDR ETF (XLB), have slightly outperformed the broader market. The XLB's total return was 35.4% over the past 12 months, just ahead of the Russell 1000's total return of 32.9%. These market performance numbers and all statistics in the tables below are as of Aug. 19, 2021.

Here are the top 3 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 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) 154.83 17.2 7.1
DuPont de Nemours Inc. (DD) 73.91 38.7 7.4
LyondellBasell Industries NV (LYB) 100.25 33.5 8.2

Source: YCharts

  • Celanese Corp.: Celanese is a global producer of chemicals and advanced materials. It produces acetyl, acetate, vinyl emulsion, and engineered polymers.
  • DuPont de Nemours Inc.: DuPont de Nemours produces construction materials, fabrics, electronics, medical devices, resins, and adhesives for the energy, automotive and other industries. DuPont reported net income of $487 million for Q2 2021 versus net loss of $2.5 billion for Q2 2020 on surging net sales year-over-year (YOY). Performance was driven by the recovery of end markets such as automotive, construction, mobile devices and semiconductors.
  • 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. On Aug. 20 the company announced a dividend of $1.13 per share, to be paid Sep. 7, 2021 to shareholders of record as of Aug. 30.

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 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 (%)
Freeport-McMoRan Inc. (FCX) 33.88 49.7 2,330 88.2
Nucor Corp. (NUE) 120.77 35.5 1,300 103.1
Steel Dynamics Inc. (STLD) 69.24 14.1 822.2 113.2

Source: YCharts

  • Freeport-McMoRan Inc.: Freeport-McMoRan is a leading international mining company with significant reserves of copper, gold, and molybdenum. The company has operations in North and South America as well as in Indonesia.
  • Nucor Corp.: Nucor is a maker of carbon and alloy steel, steel deck, steel bearing products, and cold finished steel. The company also acts as a broker of various types of metals. Nucor announced on Aug. 9 that it had completed the acquisition of Cornerstone Building Brands' insulated metal panels business for a cash purchase price of approximately $1 billion. The acquisition is expected to enhance Nucor's offerings of the high-end architectural, cold storage, and warehousing markets.
  • 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. Steel Dynamics announced on Aug. 20 a quarterly cash dividend of $0.26 per share, payable on Oct. 15 to shareholders of record as of Sep. 30, 2021.

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 (%)
Olin Corp. (OLN) 45.43 7.3 329.6
Cleveland-Cliffs Inc. (CLF) 25.04 12.5 290.6
United States Steel Corp. (X) 29.45 8.0 272.3
Russell 1000 N/A N/A 32.9
Materials Select Sector SPDR ETF (XLB) N/A N/A 35.4

Source: YCharts

  • 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. Olin reported net income of $355.8 million for Q2 2021 as compared with net loss for Q2 2020, as well as 79.0% YOY growth in sales. Record quarterly results in the company's epoxy business contributed to the performance.
  • Cleveland-Cliffs Inc.: Cleveland-Cliffs is a major North American flat-rolled steel producer and major supplier of iron ore pellets.
  • United States Steel Corp.: United States Steel is an integrated steel producer that 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. United States Steel reported net income of $1.0 billion for Q2 2021 versus net loss one year prior. Net sales climbed by 140.3% YOY driven by an overall strong market environment.

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