Is BHP Group Limited (BHP) Stock Outpacing Its Basic Materials Peers This Year?
Investors interested in Basic Materials stocks should always be looking to find the best-performing companies in the group. BHP (BHP) is a stock that can certainly grab the attention of many investors, but do its recent returns compare favorably to the sector as a whole? By taking a look at the stock's year-to-date performance in comparison to its Basic Materials peers, we might be able to answer that question.
BHP is a member of our Basic Materials group, which includes 240 different companies and currently sits at #2 in the Zacks Sector Rank. The Zacks Sector Rank considers 16 different sector groups. The average Zacks Rank of the individual stocks within the groups is measured, and the sectors are listed from best to worst.
The Zacks Rank is a proven model that highlights a variety of stocks with the right characteristics to outperform the market over the next one to three months. The system emphasizes earnings estimate revisions and favors companies with improving earnings outlooks. BHP is currently sporting a Zacks Rank of #1 (Strong Buy).
Over the past three months, the Zacks Consensus Estimate for BHP's full-year earnings has moved 30.6% higher. This signals that analyst sentiment is improving and the stock's earnings outlook is more positive.
Our latest available data shows that BHP has returned about 12.7% since the start of the calendar year. Meanwhile, the Basic Materials sector has returned an average of 7.6% on a year-to-date basis. This means that BHP is outperforming the sector as a whole this year.
Carpenter Technology (CRS) is another Basic Materials stock that has outperformed the sector so far this year. Since the beginning of the year, the stock has returned 38.5%.
In Carpenter Technology's case, the consensus EPS estimate for the current year increased 5.7% over the past three months. The stock currently has a Zacks Rank #2 (Buy).
To break things down more, BHP belongs to the Mining - Miscellaneous industry, a group that includes 49 individual companies and currently sits at #51 in the Zacks Industry Rank. On average, this group has gained an average of 16.8% so far this year, meaning that BHP is slightly underperforming its industry in terms of year-to-date returns.
In contrast, Carpenter Technology falls under the Steel - Speciality industry. Currently, this industry has 4 stocks and is ranked #8. Since the beginning of the year, the industry has moved +48.2%.
Going forward, investors interested in Basic Materials stocks should continue to pay close attention to BHP and Carpenter Technology as they could maintain their solid performance.
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