3 Materials Stocks to Watch as Demand Rebounds

The materials industry has experienced robust growth, driven by increasing demand across key sectors like construction, technology, renewable energy and more. As infrastructure projects expand globally and urbanization accelerates, materials such as steel, copper, and gold are in high demand.

Against this backdrop, stocks of Freeport-McMoRan Inc. (FCX), Nucor Corporation (NUE) and Hudbay Minerals Inc. (HBM) are in prime positions to benefit.

Gold, a symbol of financial stability, continues to be a top investment choice, especially amid economic uncertainty. Experts predict that gold prices could surge to $3,000 per troy ounce by 2025. Moreover, the jewelry sector also plays a significant role in this, as demand for gold continues to climb, contributing to its robust market performance.

Copper is another key driver for the materials sector’s growth. The market for copper is expected to grow significantly. As the world pushes toward renewable energy, copper’s role becomes even more vital. With prices expected to hit $10,265 per tonne in the fourth quarter of 2024, it is poised for strong growth.

Furthermore, steel, the backbone of construction, continues to see immense demand. The U.S. Census Bureau reported a 4.6% rise in construction spending in September 2024, underscoring the booming sector. That said, steel is crucial for large-scale infrastructure projects, and this demand is set to continue.

Now, let us dive deep into the fundamentals of three materials stocks, starting with #3.

Stock #3: Freeport-McMoRan Inc. (FCX)

FCX is an international mining company with significant copper, gold, and molybdenum reserves. The company’s three operational segments include Morenci, Cerro Verde and Grasberg (Indonesia mining) copper mines; the Rod & Refining operations; and Atlantic Copper Smelting & Refining.

On July 2, FCX announced that its Indonesian subsidiary, PT Freeport Indonesia, completed construction of the Manyar smelter in Gresik. The achievement fully integrates PT-FI's operations in Indonesia, strengthening its position and securing a foundation to extend long-term operating rights, enhancing FCX’s growth and stability.

For the fiscal third quarter that ended September 30, 2024, FCX’s revenues increased 16.6% year-over-year to $6.79 billion. Its operating income rose 29.9% from the year-ago value to $1.94 billion. Moreover, adjusted net income and adjusted net income per share attributable to common stock came in at $556 million and $0.38, respectively.

As of September 30, 2024, FCX’s cash and cash equivalents amounted to $5 billion, compared to $4.76 billion on December 31, 2024. Moreover, its total current assets came in at $14.55 billion, up from $14.07 billion as of December 31, 2023.

Analysts expect FCX’s revenue and EPS for the fiscal fourth quarter ending December 2024 to increase 3.9% and 25.3% year-over-year to $6.14 billion and $0.34, respectively. Moreover, the company topped the consensus revenue and EPS estimates in all of the four trailing quarters, which is impressive.

Shares of FCX have surged 11.6% over the past nine months and 18.6% over the past year to close the last trading session at $42.70.

FCX’s fundamentals are reflected in its POWR Ratings. It has a B grade for Quality. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.

FCX is ranked #13 out of 30 stocks in the Industrial – Metals industry. In addition to the POWR Rating highlighted above, you can check FCX’s ratings for Stability, Growth, Value, Momentum, and Sentiment here.

Stock #2: Nucor Corporation (NUE)

NUE is a manufacturer and seller of steel and steel products operating in the United States, Canada, and Mexico. It operates through four segments: Steel Mills; Steel Products; Raw Materials; and Nucor Data Systems. The company markets its products through an in-house sales team, supported by internal distribution and trading companies.

On June 3, NUE acquired Rytec Corporation, a high-speed commercial door manufacturer, for $565 million. The acquisition would enhance NUE’s strategy to expand into downstream businesses. By leveraging Rytec’s expertise, NUE is diversifying its portfolio, offering broader solutions that strengthen customer relationships and unlock new revenue streams in related industries.

On April 1, NUE acquired Southwest Data Products, Inc. for $115 million and launched Nucor Data Systems. The venture into data center infrastructure could position NUE as a key player in a high-demand sector. It could allow NUE to better serve customers while capitalizing on rapid growth opportunities in tech-driven infrastructure markets.

For the fiscal 2024 third quarter that ended September 28, NUE’s net sales came in at $7.44 billion. Its EBITDA was reported to be $869.02 million. Additionally, adjusted net earnings and adjusted EPS attributable to NUE stockholders came in at $352.99 million and $1.49, respectively.

Street expects NUE’s revenue and EPS for the fiscal year ending December 2025 to increase 2.1% and 14.1% year-over-year to $31.37 billion and $9.70, respectively. Moreover, the company surpassed the consensus EPS estimates in three of four trailing quarters.

NUE’s shares have gained 1.3% over the past month, closing the last trading session at $147.08.

NUE’s prospects are projected in its POWR Ratings. It has a B grade for Quality. Within the Steel industry, the stock is ranked #23 out of 30 stocks.

Click here to access NUE’s ratings for Stability, Growth, Value, Momentum, and Sentiment.

Stock #1: Hudbay Minerals Inc. (HBM)

Headquartered in Toronto, Canada, HBM specializes in copper mining with a robust presence across tier-one, mining-friendly regions in Canada, Peru, and the United States. Its operations span the Constancia mine in Peru, Snow Lake in Manitoba, and the Copper Mountain mine in British Columbia.

On August 29, HBM secured an Aquifer Protection Permit from the Arizona Department of Environmental Quality for its Copper World project. The milestone could advance HBM’s next major growth initiative, set to boost annual copper production by over 50%, reinforcing its leadership in meeting global copper demand sustainably.

For the fiscal 2024 third quarter that ended September 30, HBM’s revenue increased 1.1% year-over-year to $485.77 million. Its adjusted EBITDA grew 8.1% from year-ago value to $206.20 million.

Additionally, adjusted net earnings and adjusted net earnings per share attributable to owners rose 107.9% and 85.7% from the prior year’s quarter to $50.30 million and $0.13, respectively.

The consensus revenue and EPS estimates of $627.61 million and $0.30 for the fiscal fourth quarter ending December 2024 exhibit a year-over-year rise of 4.2% and 52.2%, respectively. Furthermore, the company surpassed the consensus revenue and EPS estimates in three of four trailing quarters.

Shares of HBM have gained 59% over the past nine months and 94.1% over the past year, closing the last trading session at $8.52.

HBM’s positive fundamentals are mirrored in its POWR Ratings. The stock has an overall rating of B, translating to a Buy in our proprietary rating system.

HBM has a B grade for Growth and Sentiment. Within the Industrial - Metals industry, it is ranked #9 out of 30 stocks.

Click here to access HBM’s ratings for Stability, Value, Momentum, and Quality.

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FCX shares rose $0.28 (+0.66%) in premarket trading Monday. Year-to-date, FCX has gained 1.58%, versus a 24.40% rise in the benchmark S&P 500 index during the same period.

Aanchal's passion for financial markets drives her work as an investment analyst and journalist. She earned her bachelor's degree in finance and is pursuing the CFA program. She is proficient at assessing the long-term prospects of stocks with her fundamental analysis skills. Her goal is to help investors build portfolios with sustainable returns.

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