Mining and chemicals lead the materials sector by market cap
The top of the materials sector consists of mining and chemicals companies, which present unique challenges. Many of these companies have faced legal issues, and some are also based outside the U.S. and may be unfamiliar to the typical investor.
Investing in international companies can be challenging, as it requires learning not only about the company but also the business climate in another part of the world. The Trump administration's import tariffs can also heavily affect the materials sector, though they often change.
Still, whether you venture into international stocks or stick to U.S. companies, the materials sector presents plenty of quality investment opportunities. Top materials companies have excellent financials with consistent profits and reasonable debt levels. They perform best in a growing economy, but even during downturns, well-positioned materials companies can continue to make money.