Chemicals are in the car you drive, the clothes you wear, and almost everything else. The global chemical industry is huge, with more than $6 trillion in total annual revenue. Any market of that size presents opportunities for investors. Chemical stocks are shares of companies that manufacture, process, and/or market chemical products. Here’s what you need to know about investing in chemical stocks.
Top chemical stocks to buy in 2025
There are quite a few large-cap companies in the chemical industry that attract significant attention from investors. However, there are also some smaller companies that offer plenty of upside potential. Here are five top chemical companies, including both large and small companies:
| Name and ticker | Market cap | Dividend yield | Industry |
|---|---|---|---|
| Air Products And Chemicals (NYSE:APD) | $52.9 billion | 3.01% | Chemicals |
| Dow (NYSE:DOW) | $16.2 billion | 10.76% | Chemicals |
| DuPont de Nemours (NYSE:DD) | $16.6 billion | 1.70% | Chemicals |
| Huntsman (NYSE:HUN) | $1.3 billion | 13.00% | Chemicals |
| Tronox Plc (NYSE:TROX) | $505.7 million | 13.32% | Chemicals |
1. Air Products & Chemicals
NYSE: APD
Key Data Points
Air Products & Chemicals sells chemicals and gases for industrial use. The company markets products used by customers in about 50 countries. These customers operate across a variety of industries, including electronics, food and beverages, manufacturing, metals, and refining.
The shift to clean energy should be a significant growth driver for Air Products & Chemicals over the next decade and beyond. The company already ranks as the largest supplier of hydrogen, which is being increasingly used as a fuel for buses, trucks, and other vehicles. It's also a leader in carbon capture and gasification -- a technology that converts coal, high-sulfur-content liquids, and natural gas into syngas that is used to make chemicals and fuel, as well as to produce energy.
The company's adjusted earnings per share have increased at a double-digit percentage annually since 2014. Air Products & Chemicals has increased its dividend for more than 40 consecutive years.
2. Dow
NYSE: DOW
Key Data Points
Founded in 1897, Dow is one of the oldest chemical companies in the world. The company's products include coatings, industrial intermediates (chemicals used by other industries), plastics, and silicones manufactured in 31 countries.
Although Dow's business was affected by the COVID-19 pandemic, its future prospects appear strong. The global economic rebound has helped boost automotive, electronics, housing, and industrial markets -- all of which are key consumers of Dow's products. Long-term increasing demand for renewable energy, electric and autonomous vehicles, and high-speed 5G networks should also help Dow continue to grow.
The company's dividend is another big plus. Dow's dividend yield has remained near or above 4% throughout most of the period since its spinoff from DowDuPont in 2019.
3. DuPont de Nemours
NYSE: DD
Key Data Points
4. Huntsman Corporation
NYSE: HUN
Key Data Points
Huntsman generates more than 60% of its total revenue by selling polyurethane products, including insulation and construction materials. It also makes chemicals and materials used in fuel, along with lubricant additives, adhesives, coatings, apparel, furnishings, and more.
The company claims 31% of the $8.2 billion North American spray polyurethane foam (SPF) insulation market. It's also a key player in the SPF markets in Asia and Europe, but still has significant room for growth.
Like several other major chemical companies, Huntsman has completed several acquisitions and divestitures in recent years. Most recently, the company sold its textile effects division to Archroma in 2023.
5. Tronox Holdings
NYSE: TROX
Key Data Points
Tronox is the world's top vertically integrated manufacturer of titanium dioxide pigment. The company has mining operations in Australia and South Africa and pigment facilities in several other countries. Its operations provide raw materials used to produce titanium dioxide pigments used in paints, paper, plastics, and other products.
This chemical stock is more of a turnaround play than the others on our list. Tronox's share price has fallen significantly since mid-2024, and the company has reported multiple quarterly losses.
However, Tronox should be well positioned to grow over the long term. Demand for titanium dioxide should increase by a compound annual growth rate of 7.1% through 2032. The company also has opportunities to expand its position as a supplier of rare earth oxides used in the production of permanent magnets.
Close to 80% of the chemical industry focuses on producing polymers and plastics, linking it closely with the oil industry.
What are the benefits and risks of investing in chemical stocks?
Perhaps the biggest benefit of investing in chemical stocks is that their products are essential for multiple industries. This translates to sustained long-term demand.
Chemical companies also typically have significant global exposure. Investing in chemical stocks can provide some diversification for anyone with a portfolio heavily weighted toward stocks dependent on U.S. sales.
Many chemical stocks also offer solid dividends. The relatively stable cash flows of mature chemical companies allow them to pay attractive dividends and increase their dividend payouts over time.
One of the biggest risks associated with investing in chemical stocks is that they're cyclical in nature. Cyclical stocks perform well when the economy is chugging along, but they can decline sharply when the economy struggles.
Chemical stocks can also be highly sensitive to commodity price fluctuations. Many chemicals are made from petroleum and natural gas.
Also, the benefit of chemical stocks having significant global exposure comes with a downside. Geopolitical conflicts and steep tariffs can hamper chemical companies' growth.
How to choose the best chemical stocks
Consider the following factors when selecting the best chemical stocks to buy:
- Revenue growth
- Profitability
- Dividend yield
- Track record of innovation
- Amount of investments in research and development
- Competitive position
- Valuation
How to invest in chemical stocks
Once you have chosen a chemical stock, follow these steps to invest in the stock:
- Open your brokerage app: Log in to your brokerage account where you handle your investments.
- Search for the stock: Enter the ticker or company name into the search bar to bring up the stock's trading page.
- Decide how many shares to buy: Consider your investment goals and how much of your portfolio you want to allocate to this stock.
- Select order type: Choose between a market order to buy at the current price or a limit order to specify the maximum price you're willing to pay.
- Submit your order: Confirm the details and submit your buy order.
- Review your purchase: Check your portfolio to ensure your order was filled as expected and adjust your investment strategy accordingly.
Related investing topics
The cyclical nature of the chemical industry
The chemical industry is tightly linked with several other industries, especially the oil industry. Almost 80% of the chemical industry focuses on producing polymers and plastics, which are typically made from petrochemicals.
Many of the polymers and plastics manufactured by chemical companies are used by consumer goods companies. Automakers use plastic and polymers in building cars and trucks, and synthetic rubber is used in manufacturing tires.
Chemicals are also used to make fertilizers and other products for the agriculture industry, as well as ingredients for the food industry, paints, and other key building and construction products. They’re also critical in the development of many drugs.
Because of the close interconnections with so many other industries, the fortunes of the chemical industry are strongly correlated with the health of the overall economy. As a result, chemical stocks tend to be cyclical in nature. For long-term investors, though, buying and holding the stocks of high-quality chemical companies can pay off nicely.
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