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The Best Large Cap Basic Material Dividend Stocks with Highest Growth Potential

Basic material stocks are important for the economy. They are also very cyclic depending on commodity prices. Despite the downward trend of the economic growth worldwide, stocks from the sector are still on the buy list of many investors.

I screened some investment ideas from the basic material sector with a higher market capitalization (over $10 billion) and very high expected earnings per share growth of more than 15 percent yearly for the next five years. Nineteen companies fulfilled the mentioned criteria, three of which are high-yields and 17 are currently recommended to buy.

The two best results come from the gold and silver industry. Otherwise, the results are mainly marked by oil and gas related companies.

Here are my favorite stocks:

ArcelorMittal (MT) has a market capitalization of $23.56 billion. The company employs 255,000 people, generates revenue of $93.973 billion and has a net income of $1.798 billion. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $9.580 billion. The EBITDA margin is 10.19 percent (the operating margin is 5.21 percent and the net profit margin is 1.91 percent).

Financial Analysis: The total debt represents 21.68 percent of the company’s assets and the total debt in relation to the equity amounts to 46.6 percent. Due to the financial situation, a return on equity of 3.03 percent was realized. Twelve trailing months earnings per share reached a value of -$0.51. Last fiscal year, the company paid $0.75 in the form of dividends to shareholders. The earnings per share are expected to grow by 26.4 percent yearly for the next five years.

Market Valuation: Here are the price ratios of the company: The P/E ratio is not calculable, the P/S ratio is 0.25 and the P/B ratio is 0.42. The dividend yield amounts to 4.93 percent and the beta ratio has a value of 2.12.

Newmont Mining (NEM) has a market capitalization of $23.86 billion. The company employs 17,100 people, generates revenue of $10.358 billion and has a net income of $1.097 billion. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $2.898 billion. The EBITDA margin is 27.98 percent (the operating margin is 17.98 percent and the net profit margin is 10.59 percent).

Financial Analysis: The total debt represents 15.7 percent of the company’s assets and the total debt in relation to the equity amounts to 33.44 percent. Due to the financial situation, a return on equity of 3.83 percent was realized. Twelve trailing months earnings per share reached a value of $0.40. Last fiscal year, the company paid $1 in the form of dividends to shareholders. The earnings per share are expected to grow by 39.2 percent yearly for the next five years.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 120.73, the P/S ratio is 2.28 and the P/B ratio is 1.84. The dividend yield amounts to 2.91 percent and the beta ratio has a value of 0.33.

Halliburton Company (HAL) has a market capitalization of $28.36 billion. The company employs 70,000 people, generates revenue of $24.829 billion and has a net income of $3.01 billion. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $6.096 billion. The EBITDA margin is 24.55 percent (the operating margin is 19.08 percent and the net profit margin 12.12 percent).

Financial Analysis: The total debt represents 20.36 percent of the company’s assets and the total debt in relation to the equity amounts to 36.52 percent. Due to the financial situation, a return on equity of 25.5 percent was realized. Twelve trailing months earnings per share reached a value of $3.13. Last fiscal year, the company paid $0.36 in the form of dividends to shareholders. The earnings per share are expected to grow by 17.18 percent yearly for the next five years.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 9.78, the P/S ratio is 1.14 and the P/B ratio is 2.13. The dividend yield amounts to 1.18 percent and the beta ratio has a value of 1.55.

Take a closer look at the full table of the best basic material large cap dividend stocks with the highest EPS forecast. The average P/E ratio amounts to 19.04 and forward P/E ratio is 26.4. The dividend yield has a value of 2.88 percent. The P/B ratio is 2.56 and the P/S ratio is 3.81. The operating margin amounts to 21.95 percent. The average stock has a debt to equity ratio of 1.04.

* I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I receive no compensation to write about any specific stock, sector or theme.

About the author:

Dividend
I am a private full time investor searching for investments and investment ideas.

Visit Dividend's Website


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