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.

Freeport-McMoRan (NYSE: FCX)

30.99 1.42 (4.8%)
35.35M
44.94B
29.15 - 30.99
28.87 - 51.99

Freeport-McMoRan Inc is an international mining company. It operates geographically diverse assets with proven and probable mineral reserves of copper, gold and molybdenum. The company’s portfolio of assets includes the Grasberg minerals district in Indonesia; and mining operations in North America and South America, including the large-scale Morenci minerals district in Arizona and the Cerro Verde operation in Peru. It derives key revenue from the sale of Copper.

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Ternium (NYSE: TX)

37.66 -0.36 (-0.95%)
46.36K
7.39B
37.5 - 38.27
34.83 - 56.86

Ternium SA is a flat steel producer operating in Mexico, Brazil, Argentina, Colombia, the southern United States, and Central America. It produces finished and semi-finished steel products and iron ore, which are sold either directly to steel manufacturers and steel processors or end-users. The company operates in two segments: Steel and Mining. In its steel segment, the company produces slabs, billets & round bars, hot-rolled coils & sheets, bars & stirrups, wire rods, steel pipes, and other products. The Mining segment sells iron ore as concentrates (fines) and pellets. The vast majority of its revenue comes from the steel segment. Its geographical segments are Mexico, the Southern region, and Brazil & Other markets.

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LyondellBasell Industries (NYSE: LYB)

89.17 4.67 (5.53%)
3.57M
29.21B
85.38 - 89.7
83.5 - 117.22

LyondellBasell Industries NV is a petrochemical producer with operations in the U.S. and Europe. It operates in six segments: Olefins and Polyolefins-Americas (O&P-Americas), Olefins and Polyolefins-Europe, Asia, International (O&P-EAI), Intermediates and Derivatives (I&D), Advanced Polymer Solutions (APS), Refining and Technology. The company is a major producer of polyethylene, the world’s largest producer of polypropylene, and the second- largest producer of propylene oxide. Its chemicals are used in various consumer and industrial end products. Substantially, all of the company’s revenue is derived from product sales.

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Air Products & Chemicals (NYSE: APD)

252.44 10.38 (4.29%)
1.53M
55.98B
243.95 - 252.595
216.24 - 316.39

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.

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Newmont (NYSE: NEM)

64.20 1.34 (2.13%)
7.67M
50.95B
61.88 - 64.3967
52.6 - 86.37

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.

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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.

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Premarket Basic Materials Stocks
Symbol Last Price Change % Change Trade
USAU 4.4 0.6 15.78% Trade
CSTM 13.56 1.61 13.47% Trade
CENX 8.01 0.9 12.65% Trade
PPTA 3.83 0.43 12.64% Trade
GATO 3.345 0.365 12.24% Trade
MP 35.64 3.54 11.02% Trade
ASIX 34.82 3.43 10.92% Trade
GSM 6.195 0.605 10.82% Trade
ITRG 0.96 0.09 10.34% Trade
IDR 7.92 0.72 9.99% Trade
Symbol Last Price Change % Change Trade
AXU 0.3895 -0.03 -7.27% Trade
MKD 0.649899 -0.04 -5.82% Trade
NMG 4.71 -0.27 -5.43% Trade
JCTCF 6.2 -0.3 -4.62% Trade
SMTS 0.8453 -0.04 -4.49% Trade
MBII 0.9974 -0.043 -4.1% Trade
GPRE 27.01 -1.15 -4.09% Trade
SLVM 32.04 -1.35 -4.05% Trade
LWLG 6.625 -0.275 -3.99% Trade
ORGN 5.25 -0.19 -3.5% Trade
Market Basic Materials Stocks
Symbol Last Price Change % Change Trade
FURY 0.56 0.051 10.08% Trade
ITRG 0.95 0.08 9.19% Trade
AXU 0.45 0.03 7.14% Trade
USAU 4 0.2 5.26% Trade
AMR 135.4 6.4 4.96% Trade
SUZ 9.18 0.42 4.79% Trade
LITM 2.89 0.13 4.71% Trade
TMC 1.12 0.05 4.67% Trade
LXU 13.79 0.56 4.23% Trade
TRX 0.3738 0.014 3.83% Trade
Symbol Last Price Change % Change Trade
ITP 0.162 -0.007 -4.03% Trade
NUE 102.24 -3.8 -3.59% Trade
LGO 6.89 -0.19 -2.69% Trade
AAU 0.2349 -0.006 -2.33% Trade
EXN 0.44 -0.007 -1.57% Trade
EGO 6.81 -0.06 -0.88% Trade
FUL 58.75 -0.49 -0.83% Trade
FNV 134.73 -1.04 -0.77% Trade
SXC 6.62 -0.05 -0.75% Trade
PLG 1.44 -0.01 -0.69% Trade
After Hours Basic Materials Stocks
Symbol Last Price Change % Change Trade
LITM 2.94 0.18 6.52% Trade
LWLG 6.9 0.28 4.22% Trade
ZY 1.56 0.06 4% Trade
GLDG 1.07 0.03 2.88% Trade
PLL 42.5 0.86 2.06% Trade
AREC 1.58 0.03 1.93% Trade
TMC 1.08 0.02 1.88% Trade
SLI 4.79 0.08 1.69% Trade
GEVO 2.54 0.04 1.6% Trade
HYMC 1.29 0.015 1.17% Trade
Symbol Last Price Change % Change Trade
ITP 0.155 -0.014 -8.45% Trade
AUMN 0.361 -0.019 -5.01% Trade
SMG 79.39 -2.88 -3.51% Trade
MKD 0.63 -0.02 -3.08% Trade
SVM 2.66 -0.07 -2.57% Trade
WWR 1.19 -0.03 -2.46% Trade
MUX 0.49 -0.01 -2.01% Trade
UAMY 0.4051 -0.005 -1.2% Trade
GPL 0.1344 -0.002 -1.18% Trade
CC 31.21 -0.35 -1.11% 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.

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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.

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Best For
  • Active traders
  • Intermediate traders
  • Advanced traders
Pros
  • No account maintenance fees or software platform fees
  • No charges to open and maintain an account
  • Intuitive trading platform with technical and fundamental analysis tools
Cons
  • Does not support trading in mutual funds, bonds or OTC stocks
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Best For
Active 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.

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Best For
  • Cost-conscious traders
  • Active and Advanced traders
Pros
  • Over 8,000 different stocks that can be sold short
  • 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.
Cons
  • No chat support
get started securely through eTrade’s website
Best For
Desktop Trading
N/A
1 Minute Review

E*TRADE is an online discount trading house that offers brokerage and banking services to individuals and businesses. One of the first brokers to embrace online trading, E*TRADE not only survived both the dot-com bubble and Recession — it thrived. You can choose from two different platforms (one basic, one advanced). E*TRADE is a suitable broker for traders of most skill levels, whether you want to buy mutual funds and hold them for decades or dabble in options swing trading. E*TRADE offers a library of research and education materials to help you out.

Best For
  • Active traders
  • Derivatives traders
  • Retirement savers
Pros
  • Sophisticated trading platforms
  • Wide range of tradable assets
  • Exceptional customer service
Cons
  • Limited currency trading
  • Higher margin rates than competitors
  • No paper trading on its standard platform
get started securely through Interactive Broker’s website
Best For
GlobalAnalyst Product
N/A
1 Minute Review

This latest groundbreaking technology is IBKR GlobalAnalyst, a new trading tool that helps investors compare the rate of PEG or price-earnings growth valuations and provide more immediate and comprehensive financial metrics of stocks, globally.

Recognizing that stock selection can be challenging for investors to compare the valuations of domestic and international stocks, Interactive Brokers created GlobalAnalyst to offer investors a simple, yet powerful tool to easily evaluate investment opportunities around the world.

Using GlobalAnalyst, investors can search for stocks by region, country, industry, market capitalization and currency to uncover undervalued stocks worldwide. The resulting table displays the current market and financial metrics, including the PEG Ratio. The PEG Ratio is the PE ratio divided by the three-year compound earnings growth rate, and smaller PEG Ratios typically indicate undervalued companies.

Best For
  • Price earnings growth valuations
Pros
  • Easily evaluate investment opportunities
Cons
get started securely through CenterPoint Securities’s website
Best For
Momentum traders
N/A
1 Minute Review

CenterPoint Securities is ideal for active traders who demand access to advanced tools and services. While investors and casual traders are likely to be content with the basic offerings of traditional online brokerages, active traders will benefit from CenterPoint’s suite of advanced trading tools. If you value execution quality, access to short inventory, advanced trading platforms, and accessible customer service, CenterPoint is an excellent choice.

Best For
  • Intermediate to Advanced traders
  • High-volume traders
  • Momentum traders
  • Short sellers
Pros
  • Unrivaled access to short inventory
  • Flexible order routing for improved executions
  • Discounts for active traders
  • Advanced platform with fast executions
  • Reliable customer service
Cons
  • Not designed for beginner or low-volume traders

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.