Is Methanex (MEOH) Stock Outpacing Its Basic Materials Peers This Year?

For those looking to find strong Basic Materials stocks, it is prudent to search for companies in the group that are outperforming their peers. Methanex (MEOH) 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.

Methanex is one of 248 companies in the Basic Materials group. The Basic Materials group currently sits at #14 within the Zacks Sector Rank. The Zacks Sector Rank includes 16 different groups and is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors.

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. Methanex is currently sporting a Zacks Rank of #1 (Strong Buy).

Over the past three months, the Zacks Consensus Estimate for MEOH's full-year earnings has moved 52.8% higher. This signals that analyst sentiment is improving and the stock's earnings outlook is more positive.

Based on the latest available data, MEOH has gained about 53% so far this year. Meanwhile, stocks in the Basic Materials group have gained about 16.8% on average. This means that Methanex is outperforming the sector as a whole this year.

Another Basic Materials stock, which has outperformed the sector so far this year, is Nutrien (NTR). The stock has returned 17.3% year-to-date.

In Nutrien's case, the consensus EPS estimate for the current year increased 7.4% over the past three months. The stock currently has a Zacks Rank #2 (Buy).

Breaking things down more, Methanex is a member of the Chemical - Diversified industry, which includes 29 individual companies and currently sits at #171 in the Zacks Industry Rank. This group has gained an average of 33.9% so far this year, so MEOH is performing better in this area.

Nutrien, however, belongs to the Fertilizers industry. Currently, this 6-stock industry is ranked #18. The industry has moved +21% so far this year.

Going forward, investors interested in Basic Materials stocks should continue to pay close attention to Methanex and Nutrien as they could maintain their solid performance.

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This article originally published on Zacks Investment Research (zacks.com).

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