Is Methanex (MEOH) Outperforming Other Basic Materials Stocks 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? A quick glance at the company's year-to-date performance in comparison to the rest of the Basic Materials sector should help us answer this question.

Methanex is one of 294 companies in the Basic Materials group. The Basic Materials group currently sits at #12 within the Zacks Sector Rank. The Zacks Sector Rank considers 16 different groups, measuring the average Zacks Rank of the individual stocks within the sector to gauge the strength of each group.

The Zacks Rank is a successful stock-picking model that emphasizes earnings estimates and estimate revisions. The system highlights a number of different stocks that could be poised to outperform the broader market over the next one to three months. 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 5.7% higher. This means that analyst sentiment is stronger and the stock's earnings outlook is improving.

Based on the most recent data, MEOH has returned 60.5% so far this year. Meanwhile, the Basic Materials sector has returned an average of 7.8% on a year-to-date basis. This means that Methanex is performing better than its sector in terms of year-to-date returns.

One other Basic Materials stock that has outperformed the sector so far this year is Royal Gold (RGLD). The stock is up 7.8% year-to-date.

Over the past three months, Royal Gold's consensus EPS estimate for the current year has increased 2.7%. The stock currently has a Zacks Rank #2 (Buy).

Looking more specifically, Methanex belongs to the Chemical - Diversified industry, a group that includes 32 individual stocks and currently sits at #204 in the Zacks Industry Rank. Stocks in this group have gained about 18.7% so far this year, so MEOH is performing better this group in terms of year-to-date returns.

On the other hand, Royal Gold belongs to the Mining - Gold industry. This 47-stock industry is currently ranked #194. The industry has moved -4.6% year to date.

Methanex and Royal Gold could continue their solid performance, so investors interested in Basic Materials stocks should continue to pay close attention to these stocks.

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

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