New chemicals companies, chemical makers and chemical production companies are popping up all over the world. And it’s not just because a lot of people think that chemicals are cool. The truth is that the global chemical industry is experiencing explosive growth. In fact, many analysts believe that chemicals will continue to be an important part of the global economy for the foreseeable future. But with so many different options out there, how does an investor know which chemicals stocks to buy? Fortunately, there are four great chemicals stocks that any forward-thinking portfolio should have. Let’s take a look at why these four companies stand out from the crowd and why they could be great additions to your portfolio today.
3M Company
This may be surprising, but 3M Company has been around for almost 120 years now. Founded in 1902, this company has endured for nearly three full centuries. The company got its start making sandpaper, but it quickly grew into producing many other products, including adhesives and chemicals. Today, 3M has a market capitalization of more than $120 billion USD and is one of the 30 components of the Dow Jones Industrial Average. The company has a deep balance sheet that gives it plenty of flexibility as it moves forward with its plans. 3M’s strong financial position, coupled with its long-term perspective, make it an attractive investment with a lot of room for upside.
BASF SE
This German chemicals company has been around since 1865, making it one of the oldest companies on this list. BASF is a global company with a market cap of more than $50 billion USD, making it one of the largest chemicals companies in the world. The company has a wide range of products, including crop protection, oil and gas, fine chemicals, performance products, and more. BASF is also a strong player in the agricultural chemicals sector, with a wide range of pesticides, herbicides, and insecticides. In fact, the company accounts for about a fifth of the global pesticide market. BASF has a strong track record of growth and profitability over the years, and it pays a generous dividend each year.
DuPont Co.
This American company has been around since 1802, making it one of the oldest chemical companies on this list. DuPont started out making gunpowder before moving into chemicals and fibers, and it has built a strong reputation over the years. The company’s products are used in many different industries and in many different products. It has a strong presence in the agriculture sector, for example, where its seed traits and insecticides are widely used. DuPont also has a strong presence in the automotive industry. The company’s paint, coatings, and fabrics help make cars safer, more secure, and more fuel efficient. In addition to its operations in the U.S., DuPont also has significant operations in Asia and Europe.
L’Oreal
This company is a major producer of cosmetics and personal care products. It was founded in France in 1909 when a chemist named Eugène Schueller bought a small hair dye company called the Société Chemique des Couleurs d’Héroult. That company eventually became L’Oreal, and it is now one of the largest cosmetics companies in the world with more than 35,000 employees and $25 billion USD in annual revenue. L’Oreal owns some of the most recognizable brands in the cosmetics industry, including Garnier, Maybelline, Lancôme, and The Body Shop. L’Oreal is a globally diversified company with a strong track record of long-term shareholder value creation.
Chemours Co.
This chemicals company is one of the most promising stocks in this list. Although it is a relatively new company (it was formed in 2015 as a spinoff from DuPont), it has a very attractive business model. Chemours produces a wide range of chemicals for various industries, including agriculture and refrigerants. Many of the company’s core products have strong growth potential in the years to come, and demand for these chemicals is expected to rise as the global population grows and becomes more prosperous. Chemours has a market capitalization of around $6 billion USD, and it pays a dividend of 2.6%. This is a very attractive yield for an industrial company like Chemours, and it could be a great addition to any portfolio.
Bottom line
Investors in the chemicals industry can expect to see strong growth over the next decade as the global population rises and industrial activity increases. The chemicals sector is also expected to benefit from the implementation of the tax reform legislation in the United States, which is expected to increase after-tax earnings for U.S. companies. With so many great chemicals companies to choose from, now is a great time to buy chemicals stocks.
