For those looking to find strong Basic Materials stocks, it is prudent to search for companies in the group that are outperforming their peers. Air Products and Chemicals (APD) 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.
Air Products and Chemicals is one of 275 companies in the Basic Materials group. The Basic Materials group currently sits at #13 within 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 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. Air Products and Chemicals is currently sporting a Zacks Rank of #2 (Buy).
The Zacks Consensus Estimate for APD's full-year earnings has moved 1.9% higher within the past quarter. This shows that analyst sentiment has improved and the company's earnings outlook is stronger.
Based on the latest available data, APD has gained about 19.3% so far this year. Meanwhile, stocks in the Basic Materials group have gained about 11.3% on average. This shows that Air Products and Chemicals is outperforming its peers so far this year.
One other Basic Materials stock that has outperformed the sector so far this year is Quaker Chemical (KWR). The stock is up 26.2% year-to-date.
The consensus estimate for Quaker Chemical's current year EPS has increased 2.2% over the past three months. The stock currently has a Zacks Rank #2 (Buy).
Breaking things down more, Air Products and Chemicals is a member of the Chemical - Diversified industry, which includes 31 individual companies and currently sits at #102 in the Zacks Industry Rank. Stocks in this group have gained about 18.6% so far this year, so APD is performing better this group in terms of year-to-date returns.
Quaker Chemical, however, belongs to the Chemical - Specialty industry. Currently, this 46-stock industry is ranked #104. The industry has moved +11.9% so far this year.
Investors with an interest in Basic Materials stocks should continue to track Air Products and Chemicals and Quaker Chemical. These stocks will be looking to continue their solid performance.
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This article originally published on Zacks Investment Research (zacks.com).