If you’re looking for the best stocks to buy right now, chemicals might not immediately spring to mind. However, this dynamic sector has numerous potential growth opportunities. In fact, some chemical stocks outperform others in a sluggish market and remain a good bet for savvy investors. The four best chemical stocks to buy now are all micro-cap companies with specific products or services that could drive their value higher in the next 12 months. Read on to learn more about these top chemical stocks and whether they make suitable investments at this time.
The Mosaic Company (MOS)
The Mosaic Company is a significant fertilizer manufacturer and distributor. This broad focus is one of the reasons Mosaic could be a good investment in 2019 and beyond. Demand for fertilizer is highly cyclical and can be driven by specific seasonal patterns, such as an expected rise in the need for fertilizer in China during the winter due to a shorter growing season. However, the company’s focus on fertilizer also means it has to contend with changes in the wider agricultural industry. Lower commodity prices for some agricultural products, for example, can reduce demand for fertilizer and, therefore, Mosaic’s profits. Mosaic has a few other segments of its business that should help it grow long-term. The company has a joint venture to produce phosphate and potash, two critical ingredients in fertilizer. It also has a joint venture that produces sodium silicate, an essential product used in industrial chemicals.
Olin Corporation (OLN)
The Olin Corporation is a large chemical company that has been making and selling chemicals for over 100 years. Its primary focus is on producing and selling black powder, especially to the commercial shooting sports and law enforcement markets. In addition, the company’s products include smokeless powder, sporting firearms, and aerospace motors. Olin’s business model is highly cyclical. Demand for its black powder products tends to be highest during periods of extreme weather and can also be highly dependent on the rate of crime, terrorism, and other societal factors. As such, Olin’s earnings and stock value can go through significant periods of volatility. However, the company has been around for a long time, and it may be a good bet for investors looking for long-term growth.
RPM International (RPM)
RPM International is another major chemical conglomerate. The company has a wide range of segments and products, some of which are less cyclical than others. RPM’s core business segment is that of engineered polymers, including polyolefins and polyethylene. Polymers are used in various products, such as packaging, automotive parts, and construction materials. RPM’s other segments include industrial chemicals, paints, and coatings. These segments are generally less cyclical than engineered polymers and can offer more consistent earnings. That being said, all the segments in RPM’s business are detailsceptible to the overall health of the global economy.
Westlake Chemical (WLK)
The Westlake Chemical Corporation is a large, diversified chemical company. It has a wide range of products, including engineered polymers, olefins, and ethylene. It is also involved in producing commodity chemicals, including paraffin wax, caustic soda, and chlorinated organics. The company has a wide range of customers. It uses chemicals for food packaging, paper, and construction materials. Westlake is also involved in recycling hydrocarbons and has a joint venture producing ethylene and propylene from natural gas. The company’s earnings and stock value can be volatile as a result of the cyclical nature of the chemicals industry. However, the company has a long history and is diversified across several chemicals, which may make it a good bet for investors looking for long-term growth.
Chemicals stocks may not be the first sector that comes to mind when thinking of the best stocks to buy right now. However, they can be lucrative and cyclical, making them a good bet for savvy investors. In addition, these top chemical stocks can offer investors consistent earnings and strong returns.