4 Top Material Sector Stocks To Watch Right Now

While things on the retail end of the economy take a breather, U.S. industrial production figures continue to rise. As a result, investors could be eyeing the top materials sector stocks in the stock market today. In detail, it was revealed in a recent Federal Reserve report that production at U.S. factories surged by a whopping 0.9% in July. This is well above consensus estimates of 0.5% and June’s decrease of 0.2%. In particular, manufacturing output nationwide jumped by 1.4% versus economist estimates of 0.6%. 

Now, where does the materials sector come in might you ask? Well, for the most part, all of this would indicate that production efforts continue to gain momentum. Because of this, there would be a higher demand for materials involved in the manufacturing process. Even with July’s exceptional growth figures, the industrial production metric still sits below pre-pandemic levels.

With potentially more to grow, major players such as Sherwin-Williams (NYSE: SHW) and Linde (NYSE: LIN) could be in focus. Not to mention, there is also the factor of the $1 trillion infrastructure bill to consider. Should things go as planned, material companies in the infrastructure construction industry would also stand to gain. All things considered, could these materials sector stocks be top picks in the stock market now?

Best Materials Sector Stocks To Buy [Or Avoid] This Week

DuPont de Nemours Inc.

First on this list, we have DuPont, a world-class multi-industry specialty solutions company with a large global business aligned with growing, attractive end markets. In essence, the company is a global innovation leader with technology-based materials and solutions that help transform industries like transportation, electronics, construction, and health care. DD stock currently trades at $75.22 as of 11:22 a.m. ET. The company has been shifting its portfolio and investments toward higher growth and higher margin businesses in the past year. For instance, it completed the acquisition of Laird Performance Materials which strategically complements its electronics and industrial segments.

On August 3, 2021, the company reported strong second-quarter results. Firstly, net sales for the quarter were $4.1 billion, up by 26% year-over-year. DuPont said that it continues to enjoy continued positive momentum in almost all its key end markets, including automotive, semiconductor, and smartphones. Secondly, the company posted a net income of $487 million for the quarter or an adjusted earnings per share of $1.06.  It also returned approximately $800 million of capital to shareholders during the quarter through share repurchases and dividends. All things considered, will you add DD stock to your portfolio?

material stocks (DD stock)
Source: TD Ameritrade TOS

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The 3M Company

3M is a multinational conglomerate that operates in a wide number of industries. Namely, this would include the fields of industry, worker safety, and consumer goods. Impressively, it produces over 60,000 products under several of its brands. The company is known for its ultra-strong abrasives that keep processes running smoothly, to its futuristic materials that are used for today’s most challenging applications and environments. MMM stock currently trades at $197.34 as of 11:23 a.m. ET.

In late July, the company reported stellar second-quarter financials. To begin with, sales for the quarter were $8.9 billion, up by 24.7% year-over-year. On a geographic basis, the company enjoyed double-digit growth across all regions. The company also returned $1.4 billion to shareholders via dividends and gross share repurchases. 3M also reported a net income of $1.524 billion for the quarter. Also, the company raised its full-year 2021 outlook, where it expects an earnings per share of $9.70 to $10.10. With such a strong quarter, will you consider MMM stock as a top material sector stock to buy right now?

top material stocks (MMM stock)
Source: TD Ameritrade TOS

[Read More] 4 Top E-Commerce Stocks To Consider Buying Right Now

Honeywell International Inc

Next up, we have Honeywell International, a multinational conglomerate with headquarters in North Carolina. The company primarily operates in four areas of business. Namely, they are aerospace, building technologies, performance materials and technologies, and safety and productivity solutions. For instance, HON stock currently trades at $230.80 as of 11:23 a.m. ET.

On July 23, 2021, the company announced that it had beat guidance and delivered an impressive second quarter. Honeywell says that it sees sales growth and margin expansion in all four of its segments, with orders increasing by over 20%. The company also reported an earnings per share of $2.04 for the quarter. “Building on our first-quarter momentum, we executed extremely well in the second quarter. Our results were driven by top-line growth and margin expansion in all four segments. Organic sales grew 15%, led by double-digit growth in Performance Materials and Technologies, Honeywell Building Technologies, and Safety and Productivity Solutions,” said Darius Adamczyk, chairman, and chief executive officer of Honeywell. All things considered, will you buy HON stock?

best material stocks (HON stock)
Source: TD Ameritrade TOS

[Read More] Best Stocks To Invest In 2021? 4 Dividend Stocks To Watch

Cleveland-Cliffs Inc.

Another name to consider in the materials sector now would be Cleveland-Cliffs (CLF). In brief, the Ohio-based company specializes in the mining, beneficiation, and pelletizing of iron ore. On top of that, CLF is also operating in the steelmaking business. In fact, it is the largest flat-rolled steel producer in North America. As it stands, CLF stock currently trades at $25.38 as of 11:23 a.m. ET. The company’s shares are now boasting gains of over 270% in the past year. Given the current market conditions, I could see the company’s offerings being in demand.

If we take a look at CLF’s latest quarterly earnings report, this would be apparent. Last month, the company posted stellar figures across the board in its second-quarter fiscal. For starters, CLF brought in a total revenue of $5.05 billion for the quarter, marking a massive 361% year-over-year surge. Over the same time, CLF also saw its net income and earnings per share skyrocket by 729% and 529% respectively. All in all, CEO Lourenco Goncalves cites the companies’ operational efficiency and flawless execution in ramping up production as key factors for this record quarter. With CLF kicking into high gear now, would CLF stock be a top buy for you?

CLF stock
Source: TD Ameritrade TOS

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