Best large-cap basic materials stocks to invest in 2025

The basic materials sector serves as the foundation of global industrial growth, encompassing companies that produce essential commodities and materials critical to infrastructure, construction, and manufacturing. With demand steadily increasing due to global infrastructure initiatives and technological advancements, large-cap companies in this sector are uniquely positioned to thrive.

Steel Dynamics, one of the largest steel producers in the United States, benefits from its efficient operations and focus on sustainable steelmaking, making it a key player in the global push toward green infrastructure. Nucor Corporation, a leader in steel production and recycling, stands out for its innovative approach to reducing carbon emissions while maintaining robust profitability. Reliance Industries, an Indian conglomerate, leverages its diversified operations spanning petrochemicals, refining, and materials, enabling it to capitalize on emerging market growth and industrial demand.

These companies exemplify the sector's resilience and adaptability, making them compelling investment choices for 2025. Dive into our analysis to understand their strategies and growth potential.

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Before we dive into each company, let`s take a look at how your investment would have performed if you had invested in top 10 stocks mentioned in this article 5 years ago.

Now, let`s take a closer look at each of the companies:

  • Steel Dynamics (STLD)

    Steel Dynamics, Inc. is a leading steel producer headquartered in Fort Wayne, Indiana. Founded in 1993, the company has rapidly grown to become one of the largest steel producers in the United States. Steel Dynamics operates multiple steel mills and recycling facilities across North America, supplying a wide range of steel products to industries such as automotive, construction, and energy.

    The company specializes in the production of carbon steel products, including flat-rolled and long products, as well as the recycling of scrap metal into high-quality steel. Steel Dynamics is known for its advanced manufacturing technologies and commitment to sustainability, producing steel with a focus on energy efficiency and reduced environmental impact. With a strong emphasis on innovation and customer satisfaction, Steel Dynamics continues to be a key player in the global steel industry.

    Steel Dynamics financial statements

    Analysts recommendation: 1.81

    Financial Health

    • Return on assets (ROA): 7.56%
    • Return on equity (ROE): 13.08%
    • Return on investment (ROI): 9.29%

    Profitability

    • Gross margin: 13.12%
    • Operating margin: 8.52%
    • Net profit margin: 6.8%

    Growth

    • EPS (past 5 years): 26.49%
    • EPS (current): 7.57
    • EPS estimate (next quarter): 2.75
    • EPS growth (this year): 1.68%
    • EPS growth (next year): 25.54%
    • EPS growth (next 5 years): 14.42%
    • EPS growth (quarter-over-quarter): -60.71%
    • Sales growth (past 5 years): 10.88%
    • Sales growth (quarter-over-quarter): -6.92%

    💡 Why invest in Steel Dynamics?

    Several key factors make Steel Dynamics an attractive prospect for investors seeking exposure to the ever-evolving steel industry with a focus on sustainability:

    • Leader in Sustainable Steel Production: Steel Dynamics stands as a recognized leader in the development and production of sustainable steel using electric arc furnace technology and recycled scrap. This leadership position translates into a significant market share and brand recognition within the environmentally conscious steel sector.
    • Focus on Innovation: Steel Dynamics prioritizes research and development, constantly innovating to create lighter, stronger, and more environmentally friendly steel products. This focus on innovation positions Steel Dynamics for future growth in a sector increasingly demanding sustainable solutions.
    • Diversified Product Portfolio: Steel Dynamics doesn't limit itself to a single type of steel. It offers a comprehensive suite of flat-rolled steel products, long products, and fabricated steel solutions, catering to various construction and manufacturing needs.
    • Strong Customer Relationships: Steel Dynamics fosters long-term relationships with major manufacturers and construction companies, ensuring a steady stream of demand for its sustainable steel products.

    🐌 Key considerations before investing in Steel Dynamics

    While Steel Dynamics navigates the dynamic steel industry landscape with its leadership in sustainable steel production, focus on innovation, and strong customer relationships, there are challenges to consider before investing in this venture:

    • Vulnerability to Economic Downturns: Economic slowdowns can lead to decreased demand for construction and manufactured goods, impacting Steel Dynamics' sales and profitability. Monitoring economic indicators is crucial for understanding potential market fluctuations.
    • Fluctuations in Raw Material Costs: Steel Dynamics' production processes rely heavily on various recycled metals and some virgin materials. Fluctuations in the prices of these raw materials can impact the company's profit margins. Analyzing Steel Dynamics' strategies for managing these costs is key.
    • Competition Heats Up: The steel manufacturing sector is a competitive landscape, with established players and emerging companies vying for market share. Staying informed about industry trends and Steel Dynamics' strategies for maintaining its competitive edge is vital.

    Final thoughts on Steel Dynamics

    Steel Dynamics' leadership in sustainable steel production, focus on innovation, diversified product portfolio, and strong customer relationships paint a potentially promising picture for long-term investors seeking exposure to the steel industry with a focus on environmental responsibility. However, the vulnerability to economic downturns, fluctuations in raw material costs, and rising competition necessitate a cautious approach. Thorough research, analysis of Steel Dynamics' future plans and the global steel industry landscape, and a clear understanding of your risk tolerance are crucial before joining this steel industry expedition. Remember, navigating the intricate terrain of steel stocks requires both an awareness of economic trends and a discerning eye for innovation in the steel manufacturing sector. Choose wisely, and your portfolio might find itself standing strong alongside the success story of Steel Dynamics.

  • Nucor (NUE)

    Nucor Corporation is one of the largest steel manufacturers in the United States, headquartered in Charlotte, North Carolina. Founded in 1940, Nucor has grown to become a leader in the production of steel products, serving a wide range of industries including construction, automotive, and energy. The company operates numerous mills across North America and has a strong focus on sustainability and innovation within the steel industry.

    Specializing in the production of carbon and alloy steel products, Nucor's offerings include flat-rolled, long products, and structural steel. The company is known for its efficient and environmentally friendly mini-mill technology, which allows for the recycling of scrap metal into high-quality steel. With a commitment to operational excellence and customer satisfaction, Nucor continues to be a major force in the steel production sector, driving both industry growth and sustainability.

    Nucor financial statements

    Analysts recommendation: 1.69

    Financial Health

    • Return on assets (ROA): 3.88%
    • Return on equity (ROE): 6.54%
    • Return on investment (ROI): 4.98%

    Profitability

    • Gross margin: 10.65%
    • Operating margin: 7.12%
    • Net profit margin: 4.38%

    Growth

    • EPS (past 5 years): 15.38%
    • EPS (current): 5.62
    • EPS estimate (next quarter): 2.23
    • EPS growth (this year): -5.04%
    • EPS growth (next year): 31.84%
    • EPS growth (next 5 years): 14.76%
    • EPS growth (quarter-over-quarter): -80.62%
    • Sales growth (past 5 years): 6.35%
    • Sales growth (quarter-over-quarter): -3.77%

    💡 Why invest in Nucor?

    Several factors make Nucor an attractive prospect for investors seeking exposure to the vital steel industry:

    • Industry Leader: Nucor's position as the leading U.S. steel producer ensures a steady stream of revenue and a strong market presence.
    • Focus on Sustainability: Their commitment to recycling and minimizing environmental impact positions them well as the industry embraces greener practices.
    • Operational Efficiency: Nucor's continual investment in technology and innovation helps them optimize production processes, leading to cost-effectiveness.
    • Vertical Integration: From raw materials to finished products, Nucor controls much of their supply chain, providing greater control over quality and costs.

    🐌 Key considerations before investing in Nucor

    The steel industry presents its own set of challenges:

    • Cyclicality: Demand for steel can fluctuate depending on economic conditions, impacting Nucor's revenue.
    • Import Competition: The global steel market faces competition from foreign producers, potentially affecting Nucor's pricing power.
    • Raw Material Costs: Fluctuations in the price of iron ore and other raw materials can impact Nucor's profitability.
    • Regulation: Environmental regulations and trade policies can influence Nucor's operations and costs.

    Final thoughts on Nucor

    Nucor's leadership in steel production, focus on sustainability, operational efficiency, and vertical integration paint a promising picture for long-term investors seeking exposure to the American industrial sector. However, the cyclical nature of the industry, import competition, fluctuating raw material costs, and potential regulatory changes necessitate a cautious approach. Thorough research, analysis of Nucor's strategies for navigating these challenges, and a clear understanding of your risk tolerance are crucial before adding Nucor to your portfolio. Remember, the strength of American industry is built on a foundation of quality steel. Nucor's ability to deliver on this promise will be key to its continued success. Choose wisely, and your portfolio might find itself well-positioned alongside the Nucor story.

  • Martin Marietta Materials (MLM)

    Martin Marietta Materials, Inc. is a leading supplier of construction aggregates and heavy building materials, headquartered in Raleigh, North Carolina. Founded in 1993, the company has grown through strategic acquisitions and has become one of the largest producers of crushed stone, sand, and gravel in the United States. Martin Marietta's products are used in a wide variety of applications, including infrastructure, commercial, and residential construction.

    The company specializes in providing high-quality aggregates, cement, and asphalt products for both public and private sector projects. Martin Marietta serves industries such as transportation, utilities, and industrial construction, offering essential materials for roads, bridges, and other infrastructure projects. With a focus on sustainability, innovation, and customer service, Martin Marietta continues to play a key role in shaping the construction industry while supporting economic growth and development.

    Martin Marietta Materials financial statements

    Analysts recommendation: 1.79

    Financial Health

    • Return on assets (ROA): 6.28%
    • Return on equity (ROE): 11.88%
    • Return on investment (ROI): 7.26%

    Profitability

    • Gross margin: 29.23%
    • Operating margin: 22.64%
    • Net profit margin: 16.07%

    Growth

    • EPS (past 5 years): 27.15%
    • EPS (current): 17.39
    • EPS estimate (next quarter): 5.42
    • EPS growth (this year): 5.06%
    • EPS growth (next year): 14.87%
    • EPS growth (next 5 years): 12.01%
    • EPS growth (quarter-over-quarter): -88.72%
    • Sales growth (past 5 years): 6.64%
    • Sales growth (quarter-over-quarter): 8.15%

    💡 Why invest in Martin Marietta Materials?

    Martin Marietta's strong position in the building materials industry offers several potential advantages for investors seeking exposure to this critical sector:

    • Essential for Infrastructure Development: Aggregates are fundamental components in most construction projects, making Martin Marietta's products crucial for infrastructure development and urbanization.
    • Strong Demand: As populations grow and infrastructure needs continue to expand, the demand for construction materials is expected to remain high, boding well for Martin Marietta's future.
    • Vertically Integrated Model: Owning quarries, processing facilities, and even some concrete plants allows Martin Marietta to potentially control costs and improve profitability throughout the supply chain.
    • Focus on Sustainability: Martin Marietta is actively exploring ways to reduce their environmental footprint, including utilizing recycled materials and implementing energy-efficient processes. This aligns well with the growing focus on sustainable construction practices.

    🐌 Key considerations before investing in Martin Marietta Materials

    However, before investing in Martin Marietta Materials, it's crucial to consider the potential challenges they face:

    • Fluctuations in Construction Spending: The demand for construction materials can be cyclical and is heavily influenced by economic conditions. Economic downturns can lead to decreased spending on infrastructure projects, impacting Martin Marietta's revenue.
    • Competition: The construction materials industry is competitive, with established players and potential new entrants vying for market share. Maintaining efficient operations and competitive pricing will be crucial.
    • Regulation: Regulations regarding mining and environmental impact can impact Martin Marietta's operations and potentially increase compliance costs.
    • Transportation Costs: The cost of transporting bulky materials like aggregates can significantly impact Martin Marietta's profitability.

    Final thoughts on Martin Marietta Materials

    Martin Marietta's dominant position in the aggregates market, vertically integrated model, focus on sustainability, and established presence within the construction sector paint a promising picture for long-term investors seeking exposure to the essential building materials segment. However, the cyclical nature of construction spending, competition, regulations, and transportation costs necessitate careful consideration. Thorough research on global infrastructure development plans, construction spending forecasts, Martin Marietta's strategies for navigating these challenges, a comparison with other construction sector investments, and a clear understanding of your risk tolerance are crucial before adding Martin Marietta Materials to your portfolio. Remember, even the most magnificent skyscrapers need a strong foundation, and Martin Marietta is a major supplier of that foundation. Their story could be a building block for a successful investment journey.

  • Alamos Gold (AGI)

    Alamos Gold Inc. is a Canadian-based gold producer with a diverse portfolio of high-quality assets in North America, particularly in Canada and Mexico. Founded in 2003, the company has built a strong reputation in the mining industry for its operational excellence and commitment to sustainable practices. Alamos Gold operates multiple mining operations, including the Young-Davidson and Island Gold mines, which are key contributors to its gold production.

    The company specializes in the exploration, development, and extraction of gold from its various mines and projects. Alamos Gold focuses on low-cost, long-life operations, with an emphasis on maximizing returns while minimizing environmental impact. With a strong growth strategy and a focus on resource expansion, Alamos Gold continues to be a prominent player in the global gold mining industry.

    Alamos Gold financial statements

    Analysts recommendation: 1

    Financial Health

    • Return on assets (ROA): 5.49%
    • Return on equity (ROE): 7.85%
    • Return on investment (ROI): 6.66%

    Profitability

    • Gross margin: 42.44%
    • Operating margin: 36.09%
    • Net profit margin: 18.36%

    Growth

    • EPS (past 5 years): 23.11%
    • EPS (current): 0.62
    • EPS estimate (next quarter): 0.3
    • EPS growth (this year): 53.48%
    • EPS growth (next year): 20.68%
    • EPS growth (next 5 years): 23.8%
    • EPS growth (quarter-over-quarter): -65.94%
    • Sales growth (past 5 years): 14.54%
    • Sales growth (quarter-over-quarter): 19.96%

    💡 Why invest in Alamos Gold?

    Alamos Gold offers several potential advantages for investors seeking exposure to the precious metals sector:

    • Diversified Operations: Operating in multiple regions reduces reliance on any single jurisdiction and mitigates risks.
    • Growth Potential: Alamos Gold has a focus on expanding its production through exploration and development of new projects.
    • Dividend Payout: The company has a history of paying dividends to shareholders.
    • Safe Haven Asset: Gold is often considered a safe-haven asset, which can provide protection against market volatility and economic uncertainty.

    🐌 Key considerations before investing in Alamos Gold

    However, before investing in Alamos Gold, it's crucial to consider these potential challenges:

    • Commodity Price Risk: Gold prices can fluctuate significantly, impacting the company's profitability.
    • Operational Risks: Mining operations are subject to various risks, including geological challenges, labor disputes, and environmental concerns.
    • Regulatory Environment: The mining industry is subject to strict regulations, which can impact operations and costs.
    • Geopolitical Risks: Operating in different countries exposes Alamos Gold to geopolitical risks, such as political instability and currency fluctuations.

    Final thoughts on Alamos Gold

    Alamos Gold's diversified operations, growth potential, and status as a gold producer can make it an attractive investment for those seeking exposure to the precious metals sector. However, commodity price fluctuations, operational risks, regulatory challenges, and geopolitical factors necessitate careful consideration. Thorough research on Alamos Gold's mining projects, exploration activities, and financial performance is crucial before investing.

  • RPM International (RPM)

    RPM International Inc. is a global leader in specialty coatings and sealants, headquartered in Medina, Ohio. Founded in 1947, the company has expanded to become a major player in the coatings industry, with a broad portfolio of brands and products across multiple sectors. RPM International operates in more than 160 countries, serving customers in industries such as construction, automotive, and industrial manufacturing.

    The company specializes in the development, production, and distribution of high-performance coatings, sealants, and related products. RPM International's brands include well-known names such as Rust-Oleum, Tremco, and DAP, offering solutions for both consumer and professional markets. With a strong commitment to innovation, sustainability, and product quality, RPM International continues to lead the way in providing coatings and sealants that enhance performance, durability, and aesthetics across a wide range of applications.

    RPM International financial statements

    Analysts recommendation: 2.06

    Financial Health

    • Return on assets (ROA): 9.86%
    • Return on equity (ROE): 25.53%
    • Return on investment (ROI): 12.66%

    Profitability

    • Gross margin: 41.09%
    • Operating margin: 12.12%
    • Net profit margin: 8.78%

    Growth

    • EPS (past 5 years): 17.81%
    • EPS (current): 4.99
    • EPS estimate (next quarter): 1.59
    • EPS growth (this year): 4.73%
    • EPS growth (next year): 8.44%
    • EPS growth (next 5 years): 8.33%
    • EPS growth (quarter-over-quarter): -14.89%
    • Sales growth (past 5 years): 5.68%
    • Sales growth (quarter-over-quarter): -3.05%

    💡 Why invest in RPM International?

    RPM International offers several potential advantages for investors seeking exposure to the building and construction materials industry:

    • Diversified Product Portfolio: RPM operates across multiple segments, including consumer, construction, and industrial markets, reducing reliance on any single industry.
    • Strong Brand Recognition: The company owns several well-known brands, such as Rust-Oleum, DAP, and Zinsser, enhancing market penetration.
    • Global Reach: RPM has a global presence, enabling it to capitalize on growth opportunities in various regions.
    • Consistent Dividend Growth: The company has a history of increasing dividends, making it attractive to income-oriented investors.

    🐌 Key considerations before investing in RPM International

    However, before investing in RPM, it's crucial to consider these potential challenges:

    • Economic Sensitivity: The construction and industrial sectors can be cyclical, impacting demand for RPM's products.
    • Competition: The coatings and sealants market is competitive, with both established players and new entrants vying for market share.
    • Raw Material Costs: Fluctuations in the price of raw materials, such as resins and chemicals, can impact profitability.
    • Regulatory Environment: Environmental regulations and safety standards can influence product development and costs.

    Final thoughts on RPM International

    RPM International's diversified product portfolio, strong brand recognition, and global reach make it an attractive investment for those seeking exposure to the building and construction materials industry. However, the cyclical nature of the industry, competition, raw material costs, and regulatory environment necessitate careful consideration. Thorough research on RPM's product innovation, market expansion plans, and financial performance is crucial before investing.

If you are interested in other stock categories, check out my other lists of the best large-cap utility, tech, semiconductor, retail, industrial, healthcare, financial, energy, basic materials stocks.