1/10/2013

20 Highly Recommended Basic Material Stocks | Top Stock Buy List

Stocks from the basic material sector with highest buy ratings originally published at "long-term-investments.blogspot.com". 

We all want to make profits from stock trading and we have a clear focus on dividends because the regular payments are a great cash source for new investments. Above that, the dividend payments hedge us against stock price losses.

Today I like to progress with my January serial “most recommended stocks” and I like to go forward with the basic material sector. Out there are around listed 600 companies linked to the basic material sector. The sector was last year the worst performing category with an increase of 4.6 percent and should have upside potential if our economic environment changes.

It looks that investors avoid cyclic stocks. But the basic material sector has more to offer. I talk about the possibility of high scalable profits. It all depends mainly on China and how fast the economy could recover. For the time being there are no greater sings for a gaining momentum.

However, below is a small list of the 20 most recommended basic material stocks with a higher capitalization (over USD 2 billion); fifteen of the best buy rated raw material companies pay dividends and four have a high yield (over five percent).

Here are my favorite stocks:
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Rio Tinto (NYSE:RIO) has a market capitalization of $105.64 billion. The company employs 67,930 people, generates revenue of $60.537 billion and has a net income of $6.775 billion. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $17.081 billion. The EBITDA margin is 28.22 percent (the operating margin is 22.05 percent and the net profit margin 11.19 percent).

Financial Analysis: The total debt represents 17.94 percent of the company’s assets and the total debt in relation to the equity amounts to 40.82 percent. Due to the financial situation, a return on equity of 10.54 percent was realized. Twelve trailing months earnings per share reached a value of $2.24. Last fiscal year, the company paid $1.45 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 25.52, the P/S ratio is 1.83 and the P/B ratio is finally 2.04. The dividend yield amounts to 2.89 percent and the beta ratio has a value of 1.70.


”Long-Term
Long-Term Stock History Chart Of Rio Tinto (RIO)
”Long-Term
Long-Term Dividends History of Rio Tinto (RIO)
”Long-Term
Long-Term Dividend Yield History of Rio Tinto (RIO)

Schlumberger (NYSE:SLB) has a market capitalization of $95.85 billion. The company employs 113,000 people, generates revenue of $39.669 billion and has a net income of $4.793 billion. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $9.661 billion. The EBITDA margin is 24.35 percent (the operating margin is 15.98 percent and the net profit margin 12.08 percent).

Financial Analysis: The total debt represents 17.99 percent of the company’s assets and the total debt in relation to the equity amounts to 31.77 percent. Due to the financial situation, a return on equity of 15.29 percent was realized. Twelve trailing months earnings per share reached a value of $4.09. Last fiscal year, the company paid $1.00 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 17.66, the P/S ratio is 2.43 and the P/B ratio is finally 3.09. The dividend yield amounts to 1.52 percent and the beta ratio has a value of 1.37.


”Long-Term
Long-Term Stock History Chart Of Schlumberger (SLB)
”Long-Term
Long-Term Dividends History of Schlumberger (SLB)
”Long-Term
Long-Term Dividend Yield History of Schlumberger (SLB)

Williams Partners (NYSE:WPZ) has a market capitalization of $17.64 billion. The company, generates revenue of $6.729 billion and has a net income of $1.378 billion. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $2.250 billion. The EBITDA margin is 33.44 percent (the operating margin is 24.40 percent and the net profit margin 20.48 percent).

Financial Analysis: The total debt represents 50.33 percent of the company’s assets and the total debt in relation to the equity amounts to 138.43 percent. Due to the financial situation, a return on equity of 20.77 percent was realized. Twelve trailing months earnings per share reached a value of $2.57. Last fiscal year, the company paid $2.96 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 19.29, the P/S ratio is 2.60 and the P/B ratio is finally 2.74. The dividend yield amounts to 6.55 percent and the beta ratio has a value of 1.11.


”Long-Term
Long-Term Stock History Chart Of Williams Partners (WPZ)
”Long-Term
Long-Term Dividends History of Williams Partners (WPZ)
”Long-Term
Long-Term Dividend Yield History of Williams Partners (WPZ)

Take a closer look at the full list of the 20 most recommended basic material stocks. The average P/E ratio amounts to 19.60 and forward P/E ratio is 18.17. The dividend yield has a value of 2.66 percent. Price to book ratio is 3.14 and price to sales ratio 2.39. The operating margin amounts to 17.43 percent and the beta ratio is 1.57. Stocks from the list have an average debt to equity ratio of 0.99.

Here is the full table with some fundamentals (TTM):

Most Recommended Basic Material Stocks (Click to enlarge)


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Related stock ticker symbols:
TAHO, SLT, MWE, APC, EPD, RIO, CIE, GRA, GPOR, APL, FET, ACMP, CBT, ASH, PAA, SLB, SU, BHP, WPZ, ETE

Selected Articles:

* I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I receive no compensation to write about any specific stock, sector or theme.

1 comment:

  1. Anonymous1/10/2013

    The basic materials sector has not been performing well, as a result of a global financial malaise (especially the eurozone crisis and slow economic growth in China), high correlations of some industries (like copper and aluminum), a dip in construction activity (negatively impacting steel and iron ore), and the volatilities associated with the related commodities (e.g. gold, silver).

    ReplyDelete

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