Top 15 Small-Cap Basic Materials Stocks
Marvin's rules picked 15 small-cap Basic Materials stocks. Quanex Building Products, CVR Partners and NPK International score highest. Each score compares a company only with others in its own industry.
Small-cap Basic Materials companies make or process the raw inputs other businesses rely on, such as chemicals, fertilizer, steel, aluminum, building materials and precious metals. This list covers 15 smaller companies in that sector, ordered by Marvin's Overall score.
Companies in this sector often have uneven results, because their sales can rise and fall with the economy and with the prices of what they sell. Smaller companies can also be more volatile. Look at growth, margins and debt together, rather than relying on a single number.
Some stocks here have missing figures, such as margins or debt. We note this in each description, so you know where the picture is incomplete.
The list
How Marvin ranked these stocks
Marvin included companies above a minimum size and under about two billion dollars, within the Basic Materials sector. They are ranked by highest Overall score first, with at most four per industry. Marvin's scores run from zero to one hundred and are relative to each company's own industry, so a high score means a company compares well with its industry peers today. It does not compare across industries and is not a forecast.
Companies above about $300 million in size, ranked by Marvin scores (0-100, relative to each company's own industry). The Basic Materials sector, highest Overall score first, among companies under about $2 billion in size; at most 4 per industry.
The stocks, one by one
Quanex Building Products Corporation NX
Quanex has the top Overall score at 95, helped by an opportunity score of 96. Revenue grew 43.8% last fiscal year. Caution: return on equity of 6.1% is modest, debt-to-equity of 1.09 is notable, and margin data is unavailable.
CVR Partners, LP UAN
CVR Partners combines a quality score of 86 with an operating margin of 28.1% and a free cash flow margin of 21.4%, which suggest solid profitability. Revenue grew 15.4%. Caution: return on equity and debt figures are unavailable, so leverage is unclear.
NPK International Inc. NPKI
NPK International has a quality score of 89 and very low debt, with debt-to-equity of 0.05. Revenue grew 27.4% and operating margin is 17.3%. Caution: free cash flow margin is a thinner 9.2%, so less revenue turns into spare cash.
Oil-Dri Corporation of America ODC
Oil-Dri shows healthy returns, with return on equity of 19.1% and an operating margin of 13.8%. Quality scores 82. Caution: revenue growth was only 1.7%, so sales are barely expanding, and no debt figure is available.
Friedman Industries, Incorporated FRD
Friedman Industries scores 86 overall, driven by an opportunity score of 96 and a quality score of 69. Caution: revenue growth was -13.9%, a decline, and margin, return and debt data are all unavailable, so this picture is incomplete.
Tecnoglass Inc. TGLS
Tecnoglass has a gross margin of 39.6%, an operating margin of 18.3% and return on equity of 16.4%, with modest debt at 0.29. Revenue grew 10.5%. Caution: free cash flow margin was negative at -0.8%.
Mativ Holdings, Inc. MATV
Mativ's opportunity score is high at 95, but its quality score is a middling 51. Operating margin is thin at 3.5%, revenue growth was flat at 0.3%, and debt-to-equity of 2.27 is high. Debt is the main caution.
Westlake Chemical Partners LP WLKP
Westlake Chemical Partners shows strong cash generation, with a free cash flow margin of 33.1% and an operating margin of 28.8%. Quality scores 84. Caution: revenue growth was just 2.7%, and return on equity and debt data are unavailable.
REX American Resources Corporation REX
REX American Resources has a quality score of 83 and return on equity of 20.4%, with a free cash flow margin of 10.4%. Caution: revenue growth was only 1.2%, and operating margin and debt figures are unavailable.
Kaiser Aluminum Corporation KALU
Kaiser Aluminum has a return on equity of 24.1% and revenue growth of 11.5%. Caution: margins are thin, with an operating margin of 8.2% and a gross margin of 14.5%, and debt-to-equity of 1.13 is meaningful.
NWPX Infrastructure, Inc. NWPX
NWPX Infrastructure pairs an operating margin of 11.5% and a free cash flow margin of 13.9% with low debt, at debt-to-equity of 0.24. Caution: revenue growth was a modest 6.8%, and quality scores only 58.
Vox Royalty Corp. VOXR
Vox Royalty has a very high gross margin of 83.7% and revenue growth of 9.0%. Caution: return on equity is low at 5.5%, and operating margin, free cash flow margin and debt data are unavailable.
Intrepid Potash, Inc. IPI
Intrepid Potash grew revenue 17.1% and has a free cash flow margin of 9.8%. Caution: operating margin is thin at 4.3% and return on equity is low at 5.1%, so profits are modest. No debt figure is available.
LSB Industries, Inc. LXU
LSB Industries grew revenue 17.8% and has a free cash flow margin of 14.8%. Caution: operating margin is 9.5%, return on equity is 6.8%, and debt-to-equity of 0.92 is notable. Its Overall score is 64.
Stepan Co SCL
Stepan Co rounds out the list with an Overall score of 57. Revenue grew 7.0% and debt-to-equity is 0.58. Caution: operating margin of 0.8% is very thin, return on equity is -0.2%, and the opportunity score is just 32.
Common questions
What does small-cap mean?
Small-cap refers to companies with a relatively small total market value. Here that means companies under about two billion dollars in size. Smaller companies can offer more room to grow but often have bigger price swings and less financial cushion.
Why are scores only compared within an industry?
Industries have different normal margins and debt levels. A steel company and a specialty chemicals company are not run on the same economics. Comparing each company with its own industry makes the scores fairer, but it means scores from different industries are not directly comparable.
Does a high Marvin score mean a stock is a good investment?
No. The scores describe how a company's financial figures compare with industry peers today. They do not predict future results or say whether to buy, sell or hold. Basic Materials companies can also be affected by commodity prices and the economic cycle, so do your own research.
Keep reading
- Top 15 Basic Materials Stocks Ranked by Marvin Opportunity Score
- Top 15 Fastest-Growing Profitable Basic Materials Stocks
- Top 15 Basic Materials Stocks Right Now
- Top 15 Construction Materials Stocks by Marvin Score
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Marvin's scores (0-100) compare each company with others in its industry today. Growth and margin figures come from SEC filings. This is general information, not personal investment advice or a recommendation to buy or sell anything. Do your own research.