For those looking to find strong Basic Materials stocks, it is prudent to search for companies in the group that are outperforming their peers. Has CF Industries (CF) been one of those stocks this year? 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.
CF Industries is a member of our Basic Materials group, which includes 248 different companies and currently sits at #11 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 system that emphasizes earnings estimates and estimate revisions, highlighting a variety of stocks that are displaying the right characteristics to beat the market over the next one to three months. CF Industries is currently sporting a Zacks Rank of #1 (Strong Buy).
Over the past three months, the Zacks Consensus Estimate for CF's full-year earnings has moved 62.9% higher. This is a sign of improving analyst sentiment and a positive earnings outlook trend.
Our latest available data shows that CF has returned about 50.6% since the start of the calendar year. Meanwhile, the Basic Materials sector has returned an average of 16.7% on a year-to-date basis. This means that CF Industries is outperforming the sector as a whole this year.
One other Basic Materials stock that has outperformed the sector so far this year is Dow Inc. (DOW). The stock is up 48.7% year-to-date.
For Dow Inc., the consensus EPS estimate for the current year has increased 2027.8% over the past three months. The stock currently has a Zacks Rank #1 (Strong Buy).
Looking more specifically, CF Industries belongs to the Fertilizers industry, which includes 6 individual stocks and currently sits at #35 in the Zacks Industry Rank. On average, stocks in this group have gained 19.8% this year, meaning that CF is performing better in terms of year-to-date returns.
On the other hand, Dow Inc. belongs to the Chemical - Diversified industry. This 29-stock industry is currently ranked #146. The industry has moved +28% year to date.
Going forward, investors interested in Basic Materials stocks should continue to pay close attention to CF Industries and Dow Inc. as they could maintain their solid performance.
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This article originally published on Zacks Investment Research (zacks.com).