|Bid||0.00 x 800|
|Ask||0.00 x 800|
|Day's Range||38.45 - 38.85|
|52 Week Range||31.35 - 45.03|
|PE Ratio (TTM)||N/A|
|Beta (3Y Monthly)||1.32|
|Expense Ratio (net)||0.64%|
Some sectors are not geared toward all investors. The materials sector, the smallest sector weight in the S&P 500 Index at just 2.73%, is one of those groups. But the materials' size in the S&P 500 and other broad benchmarks is not the issue. Rather, materials is a cyclical sector, meaning its volatility can be more comparable to other cyclical groups, such as energy and industrials. Materials stocks often show correlations to commodities prices, making the sector vulnerable to swings in the dollar and the global economic cycle. Said simply, the materials sector is not a defensive sector. Additionally, the materials sector is unlikely to weather broader market declines. If anything, the sector is likely to perform worse than the broader market during bearish environments. As broader benchmarks slipped last year, the Materials Select Sector Index tumbled nearly 15% for the year, or more than triple the 2018 loss incurred by the S&P 500. InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 Stocks at Risk of the Global Smartphone Slowdown For the adventurous and risk-tolerant, exchange-traded funds (ETFs) might be the way to go about picking stocks in the materials sector. Here are some of the best materials ETFs to invest in if the sector bounces back. ### Materials Select Sector SPDR (XLB) Expense ratio: 0.13% per year, or $13 on a $10,000 investment. The Materials Select Sector SPDR (NYSEARCA:XLB) tracks the aforementioned Materials Select Sector Index and is the largest materials ETF in the U.S. XLB, which is more than 20 years old, "seeks to provide precise exposure to companies in the chemical, construction material, containers and packaging, metals and mining, and paper and forest products industries," according to State Street. As a cap-weighted ETF tracking a relatively small sector, there is some concentration risk with this materials ETF. Just two stocks - DowDuPont Inc. (NYSE:DWDP) and Linde Plc (NYSE:LIN) - combine for over 36% of XLB's roster. Overall, this materials ETF holds 25 stocks. Source: Shutterstock ### Fidelity MSCI Materials ETF (FMAT) Expense ratio: 0.084% per year Keeping with Fidelity's rapidly growing tradition of being a low-cost leader, the Fidelity MSCI Materials ETF (NYSEARCA:FMAT) is the currently the cheapest materials ETF on the market. Like XLB, FMAT is a cap-weighted materials ETF. That does not mean the returns generated by these two rivals will mirror each other. FMAT holds nearly 120 stocks, giving it a significantly larger lineup than XLB, meaning these materials ETFs are likely to offer varying returns from year-to-year. That was the case in 2018 when FMAT slid 17.40%, a performance that was 250 basis points worse than XLB's. * 7 Stocks to Buy That Are Run By Billionaires Like the rival XLB, FMAT is top heavy, allocating over 37% of its combined weight to DowDuPont and Linde. Source: Shutterstock ### Invesco S&P 500 Equal Weight Materials ETF (RTM) Expense ratio: 0.40% per year For investors looking to mitigate the single stock risk often associated with the materials sector the Invesco S&P 500 Equal Weight Materials ETF (NYSEARCA:RTM) is the materials ETF to consider. Regardless of sector, equal-weight ETFs typically feature smaller average market values among the underlying holdings than cap-weighted funds. The average market capitalization of RTM's 25 holdings is $25.69 billion compared to $48.33 billion for XLB's holdings. Despite the tilt toward smaller companies, that trait does not ensure RTM will perform worse than cap-weighted rivals when the materials sector slides. Last year, RTM actually performed slightly less poorly than the cap-weighted XLB and FMAT. RTM also has a value feel as over 51% of this materials ETF's holdings are classified as value stocks. None of RTM's holdings have weights exceeding 4.30%. ### SPDR S&P Metals & Mining ETF (XME) Expense ratio: 0.35% per year The SPDR S&P Metals & Mining ETF (NYSEARCA:XME) is a more tactical materials ETF, offering investors the potential for larger rewards - and greater risk - than rival materials ETFs. Home to nearly $512 million in assets under management, XME "seeks to provide exposure to the metals & mining segment of the S&P TMI, which comprises the following sub-industries: Aluminum, Coal & Consumable Fuels, Copper, Diversified Metals & Mining, Gold, Precious Metals & Minerals, Silver, and Steel," according to State Street. XME is also an equal-weight ETF and its 29 holdings definitely toward the smaller end of the market capitalization spectrum as evidenced by an average market value of $4.64 billion. This materials ETF is heavily allocated to steel, coal and aluminum producers. * 5 Big Turnaround Stocks to Buy Now Those are volatile corners of the materials sector, meaning XME cannot endure simultaneous weakness in those industries. XME's vulnerabilities to weakness in those segments was on display last year when the materials ETFs shed almost 27%. ### First Trust Materials AlphaDEX Fund (FXZ) Expense ratio: 0.64% per year Beyond the equal-weight materials ETFs highlighted here, there are other smart beta approaches to this sector. The First Trust Materials AlphaDEX Fund (NYSEARCA:FXZ) is one of those funds. FXZ follows the StrataQuant Materials Index. That index targets materials names from the Russell 1000 Index based "on growth factors including three, six and 12-month price appreciation, sales to price and one year sales growth, and, separately, on value factors including book value to price, cash flow to price and return on assets," according to First Trust. FXZ's weighting scheme is undoubtedly unique relative to other materials ETFs and its annual fee is undoubtedly high compared to the category average. Neither trait means FXZ is a "good" materials ETF as highlighted by the fund's 2018 decline of 22.60%. FXZ holds 51 stocks with a median market value of $6.89 billion and this materials ETF trades at steep discounts relative to the broader market as highlighted by a price-to-earnings ratio of just over nine. Todd Shriber does not own any of the aforementioned securities. ### More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks You Can Set and Forget (Even In This Market) * 10 Virtual Assistants for the Future of Smart Homes * 7 5G Stocks to Buy as the Race for Spectrum Tightens Compare Brokers The post 5 Maybe-Marvelous Materials ETFs to Invest In appeared first on InvestorPlace.
In this part, we’ll discuss RPM International’s free cash flow trend to see whether the company’s free cash flow can sustain its strong dividend growth plans.
Analyzing Chemical Companies in the Week Ending January 4 (Continued from Prior Part) ## RPM International’s earnings On January 4, RPM International (RPM) announced its earnings for the second quarter of fiscal 2019. The company reported an adjusted EPS of $0.52—a decline of 8.77% over the adjusted EPS of $0.57 the previous year. RPM International’s adjusted EPS fell short of analysts’ estimates of $0.68. RPM International reported revenues of $1.36 billion compared to $1.32 billion in the second quarter of 2018—3.6% growth year-over-year. However, RPM International missed analysts’ estimates of $1.38 billion. The revenue growth was mainly driven by organic growth and acquisition growth, while unfavorable foreign currency had a negative impact. Both of RPM International’s reporting segments witnessed revenue growth. Frank C. Sullivan, RPM’s chairman and CEO said, “We achieved solid top-line improvement with sales growth of 3.6%, despite the unfavorable foreign currency translation effect of 2.0%. Like many manufacturers, our bottom line was impacted by a continued rise in costs for raw materials, freight, labor, and energy, as well as adverse foreign exchange translation.” RPM International expects to report an EPS of $0.10–$0.12 for the third quarter of fiscal 2019. ## RPM International’s stock price The markets appeared to be disappointed with RPM International’s earnings. The stock price declined ~9.9% for the week and closed at 52.26. Sherwin-Williams (SHW) and Axalta (AXTA) gained 0.2% and 4.1%, respectively, for the week, while PPG Industries (PPG) declined 1.3%. The decline in RPM International’s stock price caused the stock to trade 16.7% below its 100-day moving average price of $62.71 RPM International’s 14-day relative strength index of 26 indicates that the stock has temporarily moved into the oversold position. Investors could hold RPM International indirectly by investing in the First Trust Dorsey Wright Momentum & Dividend ETF (FXZ). FXZ has invested 2.9% of its holdings in RPM International as of January 4. Browse this series on Market Realist: * Part 1 - DowDuPont’s Corteva Sold Its Herbicide Product Line * Part 2 - Celanese Completed the Next Polymers Acquisition * Part 3 - Westlake Chemical Completed the Nakan Acquisition
On October 30, International Flavors & Fragrances (IFF) was trading at a one-year forward PE multiple of 18.66x. In comparison, Sensient Technologies (SXT) was trading at a one-year forward PE multiple of 14.3x. The forward PE multiple takes a company’s future earnings into consideration.
Analyzing Specialty Chemical Companies Last Week(Continued from Prior Part)RPM International acquired Siamons International On December 17, RPM International (RPM) announced that its Rust-Oleum Group acquired Siamons International.
First Trust Advisors L.P. announces the declaration of distributions for 128 exchange-traded funds advised by FTA.
On December 12, Eastman Chemical (EMN) announced that it entered into a collaboration with Clariant to distribute its Tamisolve NxG solvent. As a result of the collaboration, Clariant will get permission to globally market and sell Tamisolve NxG under the trade name “Genagen NBP.” However, Eastman Chemical didn’t disclose the financial aspects of the collaboration. Tamisolve NxG is used in biological control agents, herbicides, fungicides, and insecticides.
In a press release on December 6, Eastman Chemical’s (EMN) board announced that it increased its regular quarterly cash dividend. To be eligible for the dividend, investors should hold Eastman Chemical shares at the close of December 17 in the company’s record. Eastman Chemical has increased its annual dividend for the ninth consecutive time.
Eastman Chemical’s (EMN) debt, which has decreased since 2015, was reflected in the declining interest expense. Since 2015, Eastman Chemical’s interest expense has fallen ~10% from $263 million to the projected $236 million for fiscal 2018. Eastman Chemical replaced notes that carried higher coupon rates with notes that carried lower coupon rates.
On November 20, Eastman Chemical (EMN) announced that its Saflex manufacturing sites have successfully completed the IATF (International Automotive Task Force) 16949:2016 quality standards. Earlier Saflex had quality certification of ISO/TS 16949. The IATF certification is considered to be the most widely used international standard quality management system in the automotive industry.
On October 25, Olin (OLN) announced its 368th consecutive quarterly dividend. To benefit from this dividend, investors must hold Olin common stock at the close of trading on November 9. Olin is expected to pay the dividend on December 10.
On October 25, Eastman Chemical (EMN) announced its third-quarter earnings results. EMN reported adjusted EPS of $2.34, a rise of 6.8% over the previous year.
Against a sluggish backdrop, it is difficult to plan investments that could fetch sure-shot returns. As such, they should focus on certain techniques while building a portfolio.
The SEC’s 13F filings by institutional investors on June 30 indicate that institutional investors own ~77.4% of Sherwin-Williams’s (SHW) outstanding shares. At the end of the second quarter, Sherwin-Williams had 94.88 million outstanding shares. Overall, 946 institutions held shares in Sherwin-Williams. Among the institutions, 392 institutions increased their position in Sherwin-Williams, 378 reduced their position, and 176 maintained their position.
Over the past six years, data indicate that Celanese (CE) has been generating positive free cash flows. In that period, CE has generated an average free cash flow of $362 million. At the end of the second quarter of 2018, it generated a free cash flow of $562 million.
On August 30, 2018, a press release from Eastman Chemical said that Tritan will be used by Apollo Brands, a part of Apollo Hospitals Enterprise. The Indian government’s BPA ban related to food contact products has resulted in Apollo selecting Eastman’s Tritan, which is BPA-free. Eastman Tritan has FDA approval and also holds many global certifications.
As of August 28, LyondellBasell’s one-year forward PE ratio stands at 10.0x. In comparison, Eastman Chemical (EMN) has a one-year forward PE ratio of 10.9x. The forward PE ratio is a measure that investors can use to compare two or more companies operating in the same industry to tell which company is overvalued and which is undervalued. The PE ratio considers the companies’ future estimated earnings when calculating the valuations.
Praxair’s (PX) Surface Technologies segment was its smallest revenue contributor in Q2 2018. Its contribution expanded 0.3 percentage points YoY (year-over-year) to 5.6% of the company’s overall revenue from 5.3%. In the second quarter, PX’s Surface Technologies revenue rose 13.9% YoY to $172 million from $151 million.
The second-quarter reporting cycle is underway with a few major banks set to report this week. Earnings for the S&P 500 index are expected to grow 19.1% from the same period last year on 8.2% higher revenues. This would represent the third consecutive quarter of double-digit earnings growth, a trend that is currently expected to continue in the second half of the year. A strong economy and historic tax cuts will continue to drive earnings higher.Source: Flickr
On May 23, Celanese announced that it will be increasing the prices of a few acetyl intermediates products. The price increase will be effective on June 1 or as the contract allows. The price increase will be in the EMEA (Europe, Middle East, and Africa), US and Canada, and Mexico and South American regions. Celanese has increased the prices of acetyl intermediates ten times in 2018.
On May 23, Huntsman’s (HUN) board of directors approved enhancing the company’s share repurchase program by infusing $550 million. At the end of the first quarter, Huntsman was left with $450 million in its share repurchase program. The company has $1 billion under its share repurchase program.
Chemours to Raise Its Debt: Good or Bad? As of May 15, Chemours’s (CC) short interest had fallen to its lowest this year, to 1.7% of outstanding shares from 2.9% at the beginning of the year. Chemours posted staggering first-quarter EPS of $1.41, marking a 101% YoY (year-over-year) increase.