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Best Basic Materials Stocks

The sheer scope of companies pooled into the basic materials sector is large enough to cast your investment net far and wide. Chemical manufacturers, forest and wood product processors, minerals and metal mining companies and packaging product manufacturers are included in the mix. Here are basic materials stocks to stay abreast of this year.

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MDU Resources Gr (NYSE: MDU)

An infrastructural materials company, MDU Resources Group Inc. provides essential products and services to the regulated energy delivery industry along with the construction materials sector. MDU is a massive employer, with 13,000 workers under its corporate umbrella during peak construction season.

For the quarter ending Dec. 30, 2020, the company generated revenue of $1.39 billion. The trailing 12-month EPS is $1.95.

28.48 -0.16 (-0.56%)
Volume 62.78K Market Cap 5.71B
28.315 - 28.78
15 - 30.55
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LyondellBasell Industries (NYSE: LYB)

LyondellBasell Industries is among the largest plastics, chemicals and refining companies in the world. It is focused on the safe delivery of chemicals, polymers, fuels and technologies to solve the challenges of the world. LyondellBasell offers its products to customers in more than 100 countries.

LyondellBasell has a market cap of $25 billion and has an EPS of $6.04 and an annual dividend yield of $4.20 per share. LyondellBasell has high liquidity, with more than 788,000 shares traded per day. It generated revenue of $34.7 billion in 2019.

107.79 1.37 (1.29%)
Volume 2.16M Market Cap 36.02B
106.96 - 109.44
33.71 - 108.22
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Rio Tinto (NYSE: RIO)

Rio Tinto Group is a pioneer in mining metals. It produces iron ore for steel, aluminum for cars and smartphones, copper for wind turbines, diamonds and titanium for household products and borates for crops that feed the world. Rio Tinto owns and operates 60 projects in 36 countries.

The mining stock has a market cap of $102 billion and an EPS of $4.41. It has a 52-week low of $35.35 and a 52-week high of $86.90. Rio Tinto has an annual dividend yield of $3.86 per share. It has high liquidity and trades more than 1 million shares per day. Rio Tinto generated revenue of $43 billion in 2019.

91.32 1.5 (1.67%)
Volume 2.71M Market Cap 147.77B
90.38 - 91.89
35.35 - 92.85
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Air Products & Chemicals (NYSE: APD)

Founded in 1940, Air Products has grown to be a world-leading industrial gases company and leading supplier of liquefied natural gas process equipment and technology. With operations in 50 countries and more than 17,000 employees, the company serves over 30 industries including metals, chemicals, refining, manufacturing, electronics and food and beverage. It runs over 750 production facilities and approximately 1,800 miles of industrial gas pipeline.

Air Products ended fiscal 2019 with $8.9 billion in sales — the U.S. and Canada accounted for 41% — and a net income of $1.9 billion. It also reported $7.94 diluted earnings per share, an increase from $6.59 in 2018.

266.01 5.03 (1.93%)
Volume 1.16M Market Cap 58.86B
261.39 - 266.97
167.43 - 327.89
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Newmont (NYSE: NEM)

Newmont is the world’s dominant gold company, producer of silver, copper, lead and zinc and the only gold producer listed in the S&P 500 index. Its collection of talent, prospects and assets is secured in favorable mining territories in Australia, Africa, South America and North America. In 2019, Newmont ranked Top Miner on CR Magazine’s 100 best corporate citizens list as well as Top Gold miner on DJSI for ESG performance for the 5th consecutive year.

The gold company reported $9.7 billion in sales and $3.91 diluted earnings per share in fiscal 2019. It also generated $2.9 billion net income from continued operations and $1.4 billion in free cash flow. Newmont was able to pay down over $1.2 billion of debt, refinance more than $600 million at the lowest rate in mining and metals history and return $1.4 billion to shareholders through share repurchases and dividends. Over the next 5 years, the company expects to deliver nearly 8 million gold equivalent ounces per year — the most of any gold company.

56.77 2.15 (3.94%)
Volume 9.27M Market Cap 45.43B
54.82 - 57.39
33 - 72.22
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Biggest Basic Material Stock Movers of the Day

The premarket movers list highlights stocks that have the highest 1-day percentage gains during the current trading session compared to the previous closing prices.

The data provided below is intended for educational purposes only, we have included the session dates for your reference.

Premarket Basic Materials Stocks
Symbol Last Price Change % Change Trade
AMRS 19.9299 4.27 27.26% Trade
PLL 80.72 6.99 9.48% Trade
CENX 16.86 1.44 9.33% Trade
EXK 6.295 0.465 7.97% Trade
HMY 4.12 0.3 7.85% Trade
KOR 1.96 0.14 7.69% Trade
OR 10.625 0.755 7.64% Trade
PVG 10.385 0.705 7.28% Trade
MP 49.41 3.21 6.94% Trade
GATO 13.85 0.87 6.7% Trade
Symbol Last Price Change % Change Trade
GSM 3.33 -0.65 -16.34% Trade
ZKIN 6.4701 -0.97 -13.04% Trade
YTEN 14.08 -1.95 -12.17% Trade
LXU 4.42 -0.46 -9.43% Trade
SNES 1.68 -0.15 -8.2% Trade
KRA 37.42 -3.06 -7.56% Trade
HDSN 1.425 -0.115 -7.47% Trade
MKD 1.31 -0.1 -7.1% Trade
CHNR 1.93 -0.14 -6.77% Trade
GEVO 9.27 -0.66 -6.65% Trade
Market Basic Materials Stocks
Symbol Last Price Change % Change Trade
AMRS 17 1.34 8.55% Trade
MP 49.5999 3.4 7.35% Trade
RETO 1.87 0.1 5.64% Trade
SEED 24.35 0.97 4.14% Trade
MERC 16.3 0.62 3.95% Trade
UAN 25 0.9 3.73% Trade
ZKIN 7.68 0.24 3.22% Trade
PVG 9.99 0.31 3.2% Trade
TX 33.5 1.01 3.1% Trade
SCCO 77 2.11 2.81% Trade
Symbol Last Price Change % Change Trade
GSM 3.62 -0.36 -9.05% Trade
BAK 10.84 -0.57 -5% Trade
HDSN 1.47 -0.07 -4.55% Trade
ACH 11.87 -0.48 -3.89% Trade
SID 5.8 -0.21 -3.5% Trade
GGB 4.6 -0.13 -2.75% Trade
VALE 17.22 -0.31 -1.77% Trade
SUZ 13.03 -0.22 -1.67% Trade
SXC 6.5 -0.07 -1.07% Trade
DRD 9.15 -0.07 -0.76% Trade
After Hours Basic Materials Stocks
Symbol Last Price Change % Change Trade
BBL 70 4.08 6.18% Trade
ZKIN 6.65 0.25 3.9% Trade
SNES 1.77 0.06 3.5% Trade
CRKN 4.65 0.15 3.33% Trade
OLN 32.49 0.74 2.33% Trade
GEVO 9.47 0.21 2.26% Trade
CLF 14.95 0.27 1.83% Trade
BVN 11.44 0.2 1.77% Trade
CX 7.07 0.12 1.72% Trade
CDE 8.97 0.14 1.58% Trade
Symbol Last Price Change % Change Trade
MKD 1.27 -0.05 -3.79% Trade
HDSN 1.4 -0.04 -2.78% Trade
AMRS 19.65 -0.3 -1.51% Trade
KOR 2 -0.03 -1.48% Trade
MUX 1.11 -0.015 -1.34% Trade
LIN 251.51 -2.61 -1.03% Trade
TMST 8.32 -0.07 -0.84% Trade
EXK 6.23 -0.05 -0.8% Trade
NUE 61.5 -0.3 -0.49% Trade
WLK 86 -0.37 -0.43% Trade

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Materials stocks are essential to the metabolism of society because this sector is responsible for producing the raw materials used by all other sectors of the stock market. 

The Trump administration’s policies skew the pitch in favor of domestic producers so this class of stocks has sparked interest among most investors. You can diversify your portfolio and add to your financial growth by trading these 5 select basic materials stocks that could outperform their earnings estimate.

Overview: Basic Materials Stocks

Basic materials stocks represent companies dealing with the discovery, development and processing of raw materials. This includes companies that make or process construction materials, chemicals, paper, glass, packaging products and forest products as well as minerals, metals and mining companies.

All stocks across this sector are very sensitive to the world economy. The sector tends to perform strongly at the beginning of an economic recovery. The companies may also weaken as the business cycle makes a transition from sharp recovery to stable expansion. Cyclical in its movements, investors often ignore this sector because it’s small or not ideal for their investing style. Basic materials make up the smallest sector exposure in the S&P 500’s 11 industrial segments — it weighs just over 2%.   

For most commodities, the supply of basic materials is in geographical areas of marginal economic development and political uncertainty. As a result, the harvesting of natural resources like metals, coal and timber lends the sector greater exposure to 3rd world countries.

Best Online Brokers for Basic Materials Stocks

To start trading basic materials stocks, you’ll need to open a brokerage account with a discount or full-service broker. An online broker can help you identify the best stocks in the basic materials sector as well as provide the platform and tools to trade. Any of the online brokers on this list can help you on your investment journey.

Best For
Intermediate Traders and Investors
Overall Rating
Get started securely through Webull’s website
Best For
Intermediate Traders and Investors
N/A
1 Minute Review

Webull, founded in 2017, is a mobile app-based brokerage that features commission-free stock and exchange-traded fund (ETF) trading. It’s regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).

Webull offers active traders technical indicators, economic calendars, ratings from research agencies, margin trading and short-selling. Webull’s trading platform is designed for intermediate and experienced traders, although beginning traders can also benefit.

Webull is widely considered one of the best Robinhood alternatives.

Best For
  • Active traders
  • Intermediate traders
  • Advanced traders
Pros
  • Commission-free trading in over 5,000 different stocks and ETFs
  • No account maintenance fees or software platform fees
  • No charges to open and maintain an account
  • Leverage of 4:1 on margin trades made the same day and leverage of 2:1 on trades held overnight
  • Intuitive trading platform with technical and fundamental analysis tools
Cons
  • Does not support trading in mutual funds, bonds or OTC stocks
Best For
Futures Trading
Overall Rating
Get started securely through TradeStation’s website
Best For
Futures Trading
N/A
1 Minute Review

TradeStation is for advanced traders who need a comprehensive platform. The brokerage offers an impressive range of investable assets as frequent and professional traders appreciate its wide range of analysis tools. TradeStation’s app is also equally effective, offering full platform capabilities.

Best For
  • Advanced traders
  • Options and futures traders
  • Active stock traders
Pros
  • Comprehensive trading platform and professional-grade tools
  • Wide range of tradable securities
  • Fully-operational mobile app
Cons
  • Confusing pricing structure to leave new traders with a weak understanding of what they pay
  • Cluttered layout to make navigating TradeStation’s platform more difficult than it should be
Best For
Options Trading
Overall Rating
Get started securely through TD Ameritrade’s website
Best For
Options Trading
N/A
1 Minute Review

This publicly listed discount broker, which is in existence for over four decades, is service-intensive, offering intuitive and powerful investment tools. Especially, with equity investing, a flat fee is charged, with the firm claiming that it charges no trade minimum, no data fees, and no platform fees. Though it is pricier than many other discount brokers, what tilts the scales in its favor is its well-rounded service offerings and the quality and value it offers its clients.

Best For
  • Novice investors
  • Retirement savers
  • Day traders
Pros
  • World-class trading platforms
  • Detailed research reports and Education Center
  • Assets ranging from stocks and ETFs to derivatives like futures and options
Cons
  • Thinkorswim can be overwhelming to inexperienced traders
  • Derivatives trading more costly than some competitors
  • Expensive margin rates
Best For
Advanced traders
Overall Rating
Get started securely through Moomoo’s website
Best For
Advanced traders
N/A
1 Minute Review

Moomoo is a commission-free mobile trading app available on Apple, Google and Windows devices. A subsidiary of Futu Holdings Ltd., it’s backed by venture capital affiliates of Matrix, Sequoia, and Tencent (NASDAQ: FUTU). Securities offered by Futu Inc., regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).

Moomoo is another great alternative for Robinhood. This is an outstanding trading platform if you want to dive deep into smart trading. It offers impressive trading tools and opportunities for both new and advanced traders, including advanced charting, pre and post-market trading, international trading, research and analysis tools, and most popular of all, free Level 2 quotes.

Get started right away by downloading Moomoo to your phone, tablet or another mobile device.

Best For
  • Cost-conscious traders
  • Novice traders
  • Active/Advanced traders
Pros
  • Free Level 2 market data for all users who open an account
  • Commission-free trading in over 5,000 different stocks and ETFs
  • Over 8,000 different stocks that can be sold short
  • $0 contract fee for trading options, no commission either
  • Strong market data and analysis tools with over 50 technical indicators
  • Access trading and quotes in pre-market (4 a.m. to 9:30 a.m. ET) and post-market hours (4 p.m. to 8 p.m. ET)
  • No minimum deposit to open an account.
  • Active trading community with more than 100,000 app users
Cons
  • No phone or chat support

Features to Look for in Basic Materials Stocks

  • Earnings growth is an important screening criterion when choosing a company to invest in. When you own stock, you take part in the growth of the underlying company, as measured by the earnings per share (EPS) growth. The earnings growth can be measured over various time frames, like year-over-year or a 5-year average. Filter out stocks with negative or declining earnings growth. A positive EPS indicates profitability.
  • Debt-equity ratio primarily measures a company’s financial strength. It’s the percentage of a company’s total capitalization owed to others versus the shareholders’ equity. A lower debt-equity ratio is better. As a reasonable rule of thumb, consider companies that have a debt-equity ratio less than 50%.
  • The position in the economic cycle also affects the demand for basic materials. Basic materials stocks suffer when the economy weakens and thrive when market conditions are on the upswing. Choose your entry point wisely. 

Trade Basic Materials Stocks

The basic materials sector has been susceptible to changes in the global economy. Even as revenue and earnings drop, it’s difficult to resist buying top stocks when prices plummet. Investing in the materials sector might seem like a bad idea at the moment, but an economic rebound triggers demand, the 5 stocks we highlighted will see a boom. Basic materials is a cyclical sector — be sure to do your homework before putting your money there. Don’t risk it all until there’s more clarity to the economy. 

Turn to Webull

0 Commissions and no deposit minimums. Everyone gets smart tools for smart investing. Webull supports full extended hours trading, which includes full pre-market (4:00 AM - 9:30 AM ET) and after hours (4:00 PM - 8:00 PM ET) sessions. Webull Financial LLC is registered with and regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA). It is also a member of the SIPC, which protects (up to $500,000, which includes a $250,000 limit for cash) against the loss of cash and securities held by a customer at a financially-troubled SIPC-member brokerage firm.