The materials industry is riding a wave of growth, fueled by surging demand across various sectors including construction, technology, and agriculture. As infrastructure investments ramp up, so does the need for steel and specialty chemicals, especially in electronics, automotive, and pharmaceuticals. This boom presents a golden opportunity for savvy investors eyeing stable materials stocks like Tenaris S.A. (TS), ICL Group Ltd (ICL), and Kronos Worldwide, Inc. (KRO).
Steel remains the backbone of large-scale infrastructure projects, with the U.S. Census Bureau reporting a 3% increase in construction spending in November 2024. This uptick signals a robust demand that doesn’t show signs of slowing down anytime soon. Meanwhile, global economic growth is driving a parallel rise in the chemicals sector, particularly in agrochemicals where specialty chemicals play a crucial role in producing advanced pesticides and fertilizers. A recent report from TechNavio predicts that the specialty chemicals market will grow by $368.20 million by 2028, boasting a 6.8% compound annual growth rate (CAGR). This kind of growth is a clear indicator of the sector’s resilience and potential.
Let’s break down the fundamentals of these three promising materials stocks, starting with Tenaris S.A. (TS). Based in Luxembourg, TS specializes in manufacturing steel pipes for the energy sector and other industrial applications. The company’s financials are nothing short of impressive, with a trailing-12-month net income margin of 20.23%, significantly outpacing the industry average. In the third quarter of fiscal 2024, TS reported net sales of $2.92 billion, with an operating income of $537.10 million. Analysts predict that by the end of 2025, TS will generate revenue of $12.43 billion, with its earnings per share (EPS) expected to rise to $3.59. Investors are clearly taking note, as TS shares have surged 21.8% over the past three months, closing at $39.23.
Next up is ICL Group Ltd (ICL), a specialty minerals and chemicals company headquartered in Tel Aviv. ICL has recently launched VeriQuel R100, an innovative phosphorus flame retardant aimed at enhancing fire safety without compromising environmental responsibility. This move aligns perfectly with industry trends leaning toward sustainability. ICL’s financial metrics reflect its solid positioning, with a gross profit margin of 32.91%, and an adjusted operating income that increased 7% year-over-year to $243 million. The stock has seen a remarkable 42.1% increase over the past three months, closing at $5.67, and analysts expect further growth in revenue and EPS for 2025.
Finally, we have Kronos Worldwide, Inc. (KRO), a player in the titanium dioxide pigment market. KRO has bounced back impressively, reporting a 22.1% increase in net sales year-over-year. The company’s net income turned around dramatically, jumping to $71.80 million compared to a loss in the previous year. The stock has risen 1.8% recently, closing at $9.14, and its strong fundamentals are reflected in its POWR Ratings, where it holds an overall rating of B.
With the materials sector on an upward trajectory, these stocks represent not just stability but also a chance for substantial returns as the demand for essential materials continues to grow. Investors looking to make their mark in this evolving landscape would do well to consider these options, as they are poised to benefit from the ongoing trends shaping the industry. The future looks bright, and those who act now may find themselves ahead of the curve.
