Commodities & Metals

Top Wall Street Strategist Turns Positive on 4 Leading Materials Stocks

The Advanced Materials segment of Eastman Chemical produces and markets its polymers, films and plastics with differentiated performance properties for value-added end uses in transportation, consumables, building and construction, durable goods, and health and wellness markets. The Chemical Intermediates segment consists of large scale and vertical integration from the cellulose and acetyl, olefins and alkylamines streams to support operating segments with advantaged cost positions.

Eastman Chemical investors receive a 3.00% dividend. Jefferies has a $91 price objective, in line with the $91.71 consensus estimate. Shares closed at $83.53 on Tuesday.


This company may be lesser known but holds solid upside potential as a sector leader. Linde PLC (NYSE: LIN) is the largest industrial gases company in the world, with sales of $30 billion following the merger of equals between Praxair and Linde. The two companies had already won a conditional green light for their tie-up back in October but had to continue operating as separate entities until the divestment of nine American business units were completed.

It produces and distributes atmospheric and process gases, high-performance surface coatings and engineering solutions. Linde products, services and technologies bring productivity and environmental benefits to a wide variety of industries, including aerospace, chemicals, food and beverage, electronics, energy, health care, manufacturing and metals. With joint annual revenues of $30 billion, some 80,000 employees and a market capitalization of $94 billion, the group overtakes France’s Air Liquide to become the industry’s global leader.

Shareholders receive a 2.08% dividend. The $190 Jefferies price target is well above the $176.40 consensus target. Shares closed at $168.44.

Martin Marietta Materials

This company posted slightly lighter fourth-quarter results but is a Wall Street favorite. Martin Marietta Materials Inc. (NYSE: MLM) is one of the largest U.S. supplier of aggregates, with operations across 27 states, Canada and the Bahamas. Its largest concentration is in Texas, comprising approximately a third of its exposure.

Unfavorable weather dampened fourth-quarter construction activity, with Texas experiencing its wettest October in history, and rains in other southeastern states hurting shipments and boosting costs. The company remains upbeat, not just on 2019 construction demand, but it also noted many states with its greatest exposure were well positioned for housing and public nonresidential construction growth.

Investors receive a 1.00% dividend. The Jefferies price objective is $232. The Wall Street figure is $209.71, and shares ended Tuesday at $194.01.

A settlement of trade issues and some growth in Europe could be huge for these top plays. While hardly exciting, as sector leaders they should provide a degree of stability for investors.