The Best Basic Materials Stocks to Buy

These nine undervalued basic materials stocks look attractive today.

Tori Brovet Oct 27, 2026

Securities in This Article

Basic materials stocks appeal to investors for a few different reasons.

They provide exposure to raw materials like metals, chemicals, and lumber, which are essential for various industries.
Basic materials companies benefit from rising commodity prices, offering investors a way to capitalize on price increases in gold, copper, and oil.
Basic materials stocks can be a hedge against inflation, as the value of natural resources tends to increase when inflation rises.

In the year to date, the Morningstar US Basic Materials Index rose 11.67%, while the Morningstar US Total Market Index gained 12.98%.

The 9 Best Basic Materials Stocks to Buy Now

These were the most undervalued basic materials stocks that Morningstar’s analysts cover as of Oct. 26, 2026.

Albemarle ALB
Corteva CTVA
Sociedad Quimica Y Minera De Chile SQM
Scotts Miracle-Gro SMG
DuPont de Nemours DD
James Hardie Industries JHX
CF Industries Holdings CF
CRH CRH
Linde LIN

To come up with our list of the best basic materials stocks to buy now, we screened for:

Basic materials stocks that are undervalued, as measured by our price/fair value metric.
Stocks that earn narrow or wide
Morningstar Economic Moat Ratings

. We think companies with narrow economic moat ratings can fight off competitors for at least 10 years; wide-moat companies should remain competitive for 20 years or more.
Stocks that earn a Low, Medium, High, or Very High
Morningstar Uncertainty Rating

, which captures the range of potential outcomes for a company’s fair value.

Here’s a little more about each of the best basic materials stocks to buy, including commentary from the Morningstar analysts who cover each company. All data is as of Oct. 26, 2026.

Albemarle

Morningstar Price/Fair Value: 0.47
Morningstar Uncertainty Rating: Very High
Morningstar Economic Moat Rating: Narrow
Industry: Specialty Chemicals

Specialty chemicals company Albemarle is the most affordable stock on our list of the best basic materials stocks to buy. Albemarle is one of the world’s largest lithium producers. The stock is trading 53% below our fair value estimate of $200 per share.

Albemarle is one of the world’s largest lithium producers, which generates the majority of total profits. It produces lithium through its own salt brine assets in Chile and the United States and two joint venture interests in Australian mines, Talison (Greenbushes) and Wodgina. The Chilean operation is among the world’s lowest-cost sources of lithium. Talison is one of the best spodumene resources in the world, which allows Albemarle to be one of the lowest-cost lithium hydroxide producers as spodumene can be converted directly into hydroxide. Wodgina is a spodumene asset that provides Albemarle with a third large resource, though it has a higher cost versus Talison. Albemarle also owns resources in the US and Argentina that are still in the early development phase, which should allow it to boost its long-term lithium volumes through the development of new projects in the coming decades.
As electric vehicle adoption increases and utility-scale batteries are built for energy storage, we expect double-digit annual growth in global lithium demand over at least the next decade. However, global lithium supply is also growing rapidly in response. Albemarle is growing its lithium volumes through the buildout of new lithium refining plants, but has largely paused new expansion plans due to cyclically low lithium prices over the past couple of years. As prices have recovered, we expect Albemarle will increase its mining and refining capacity largely through brownfield expansions at existing operations.
Albemarle is the world’s second-largest producer of bromine, a chemical used primarily in flame retardants for electronics. Bromine demand should grow over the long term as increased demand for use in servers and automobile electronics is partially offset by a decline in demand from TVs, desktops, and laptops. Over the long term, we expect Albemarle to generate healthy bromine profits due to its low-cost position in the Dead Sea.
Albemarle is also a top producer of catalysts used in oil refining and petrochemical production. These chemicals are highly tailored to specific refineries. However, 51% of this business, Ketjen, will be divested in a deal that should close in 2026.

Seth Goldstein, Morningstar senior analyst

Corteva

Morningstar Price/Fair Value: 0.60
Morningstar Uncertainty Rating: High
Morningstar Economic Moat Rating: Narrow
Industry: Agricultural Inputs

Corteva is a crop protection pure play. Corteva is an affordable basic materials stock, trading at a 40% discount to our fair value estimate of $20 per share. The agricultural inputs company earns a narrow economic moat rating.

Corteva is a crop protection pure play that was formed in 2019 when it was spun out of DowDuPont and spun off its seeds business in late 2026, which is now Vylor. Corteva is a global leader in crop protection and seed treatment products. Corteva develops its pipeline by investing around 6%-7% of sales in research and development. New products should generate sales and profit growth even as patents expire and generic products enter the market.
Roughly half of sales come from herbicides, or crop protection products that kill weeds. Herbicides complement genetically modified organism seeds and should see increased demand. Around 37% of sales come from insecticides and fungicides, which kill insects and fungi. We see long-term demand in these products falling due to an increase in GMO seeds, as GMO seeds are engineered to deal with these pests on their own.
However, Corteva’s new insecticides and fungicides use new modes of action, such as environmentally friendly biologicals, to target resistant bugs. Corteva aims for biologicals to generate 25% of crop protection sales by 2035, up from 7% in 2025. The company also sells seed applied treatments, which are coated on seeds before they are planted and allow farmers to reduce fertilizer use while maintaining the same level of crop yield.
Corteva’s portfolio skews toward patented and differentiated products, which generate around 65% of sales. The company’s largest active ingredient generated just 11% of sales in 2025. This makes Corteva not overly reliant on a single product in its portfolio, so we don’t see a large patent cliff risk when an active ingredient expires. It plans to launch multiple new products over the coming years, which should drive sales and profit growth and further diversify its active ingredient exposure.
Corteva is balanced from a crop exposure standing, with corn and soybeans making up 40% of sales and no other crop making up more than 15%. Corteva is also geographically balanced, with North America and Latin America making up over 35% and over 30% of sales, respectively, with the balance of revenue coming from the Europe, Middle East, and Africa and Asia-Pacific regions.

Seth Goldstein, Morningstar senior analyst

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Sociedad Quimica Y Minera De Chile

Morningstar Price/Fair Value: 0.67
Morningstar Uncertainty Rating: Very High
Morningstar Economic Moat Rating: Narrow
Industry: Specialty Chemicals

Next on our list of the best basic materials stocks to buy is Sociedad Quimica Y Minera De Chile. Sociedad Quimica y Minera de Chile is a Chilean commodities producer with significant operations in lithium (primarily used in batteries for electric vehicles and energy storage systems), specialty and standard potassium fertilizers, iodine (primarily used in X-ray contrast media), and solar salts. The stock is trading at a 33% discount to our fair value estimate of $85 per share.

Sociedad Quimica y Minera de Chile is a large, low-cost producer of lithium, iodine, and nitrates used in specialty fertilizers. SQM’s crown jewels are its geologically advantaged lithium and caliche ore assets in Chile. SQM’s low-cost lithium deposit in the Salar de Atacama boasts the highest concentration of lithium globally and benefits from high evaporation rates in the Chilean desert. As electric vehicle penetration increases, we expect double-digit annual growth for global lithium demand, one of the best growth profiles among commodities.
SQM is a leading global lithium producer through multiple joint ventures. The largest JV is with state-owned Codelco, named Nova Andino Litio. Nova Andino has annual production capacity in Chile of 300,000 metric tons of lithium carbonate equivalent. SQM has slightly less than a 50% equity stake in the joint venture. Nova Andino has a lease on the Salar de Atacama lithium operations through 2060.
SQM is also ramping up the Mount Holland lithium project in Australia through a joint venture with Wesfarmers. The project entered production in 2024 and is currently selling spodumene (lithium concentrate) and ramping up a lithium hydroxide refinery. The project is expanding to double spodumene capacity over time. SQM also acquired Azure Minerals in a joint venture bid with Hancock Prospecting. Azure owns 60% of the Andover lithium resource in Australia. The project is at roughly the same stage as Mount Holland when SQM bought into the project and will likely not enter production until the next decade.
SQM is also the world’s largest producer of iodine, used in X-ray contrast media, pharmaceuticals, and LCD films. Iodine demand should grow in the coming years as healthcare spending rises with aging populations.
In addition, SQM is a market leader in potassium nitrate, a specialty fertilizer used in high-value crops, including fruits and vegetables, and a small player in commodity potash. Specialty potash demand should benefit from the shift in emerging-market diets to higher-value foods.

Seth Goldstein, Morningstar senior analyst

Scotts Miracle-Gro

Morningstar Price/Fair Value: 0.74
Morningstar Uncertainty Rating: High
Morningstar Economic Moat Rating: Narrow
Industry: Agricultural Inputs

Scotts Miracle-Gro is the largest purveyor of home lawn and gardening products in the US. Trading 26% below our fair value estimate, Scotts Miracle-Gro has an economic moat rating of narrow. We think shares of this stock are worth $80 per share.

Scotts Miracle-Gro is the largest and most recognizable name in the US consumer lawn and gardening market. It sells a wide array of products for lawncare and gardening.
The US consumer segment, which consists of lawn and gardening products, generated over 90% of total revenue in fiscal 2025, excluding revenue from divested businesses. Scotts generates healthy margins on its products through branding, which allows it to maintain favorable product positioning and command shelf space in mass-market and home improvement retailers. Scotts has been able to charge a premium over competitors because of its strong brand equity. While actual product differentiation is limited, consumers are willing to pay up for Scotts’ products.
Future demand for gardening products will depend on growth in the housing industry. We expect housing starts to average 1.4 million-1.5 million per year over the next decade. While housing starts alone should increase demand for gardening products, we see some secular trends that will offset the growth. Living-preference shifts to smaller lots and urban centers should result in less need for gardening products. Additionally, a greater proportion of gardening products will be sold online. Currently, the vast majority of sales occur at brick-and-mortar retail. Even if Scotts increases its online sales presence, it may lose some pricing power as many products in the gardening industry shift away from brick-and-mortar retailers to online platforms, where Scotts will likely face more lower-priced competition.
The remainder of revenue comes from lawn and gardening products sold outside the US, mainly in Canada.
The majority of sales comes from Home Depot and Lowe’s, which combined to account for just over half of companywide revenue in fiscal 2025. This creates customer concentration risk, but Scotts has had this same risk for more than 20 years, and we don’t expect a major change in its relationship with either home improvement retailer.

Seth Goldstein, Morningstar senior analyst

DuPont de Nemours

Morningstar Price/Fair Value: 0.83
Morningstar Uncertainty Rating: High
Morningstar Economic Moat Rating: Narrow
Industry: Specialty Chemicals

DuPont is a diversified global specialty chemicals company created in 2019 as a result of the DowDuPont merger and subsequent separations. The firm earns a narrow economic moat rating, and the shares of its stock look 17% undervalued relative to our $165 fair value estimate.

DuPont is a world-renowned specialty chemicals company with a history spanning over 200 years and an ever-evolving portfolio. In its current iteration, DuPont is the specialty chemicals company created in 2019 from the DowDuPont merger and subsequent separations.
Since being spun off from DowDuPont, DuPont has divested multiple businesses through spinoff or sale. Most recently, it spun off its electronics business in late 2025 as a publicly traded company named Qnity. DuPont also sold its aramid fibers business, which contains the legacy Kevlar and Nomex materials, to private equity-owned Arclin in a deal that closed in early 2026.
On a pro forma basis excluding divestitures, DuPont generated over $6.8 billion in sales in 2025. The company has two segments: healthcare and water technologies, and diversified industrials. Healthcare and water technologies generated the majority of profits in 2025 on a pro forma basis, and this should remain the larger segment going forward. Healthcare will be DuPont’s largest end market at 25% of companywide sales. This business sells products to the medical devices, medical packaging, personal protective equipment, and pharmaceuticals industries. DuPont should benefit from an aging Western population that requires more healthcare. The water business, which will generate a little over 20% of sales, should see demand growth from rising water costs that require increased water recycling technologies, as well as the increased need for water filtration.
In diversified industrials, the largest business is building technologies, which has exposure to construction. This business contains DuPont’s legacy Tyvek product lines and should generate around 25% of sales. This business should benefit from our outlook for US housing starts of roughly 1.4 million-1.5 million annually over the coming decade. Other key end markets in this segment include advanced mobility, which will focus on electric vehicles and hybrids, aerospace, printing and packaging, and diversified industrials. As such, DuPont will continue to serve a fairly diversified set of end markets.

Seth Goldstein, Morningstar senior analyst

James Hardie Industries

Morningstar Price/Fair Value: 0.83
Morningstar Uncertainty Rating: High
Morningstar Economic Moat Rating: Wide
Industry: Building Materials

James Hardie is a manufacturer of fiber cement-based building products, selling primarily to the residential construction industry. The firm earns a wide economic moat rating, and the shares of its stock look 17% undervalued relative to our $31.50 fair value estimate.

James Hardie’s growth strategy includes marketing directly to homeowners, market share growth, and category expansion. We view this as rational and achievable, given past success. We estimate Hardie has about 90% market share in the fiber cement category in its main geography of North America, which contributes about 80% of group operating income. About 60% of North American EBIT is from repair and renovation, or R&R, and the remainder is from new house construction. We view the R&R market as less cyclical, with homes needing to be re-sided approximately every 40 years. According to the US Census Bureau, about half of all houses are 40 years or older. As such, we expect a steady pipeline of homes requiring siding replacement or repairs through the next decade.
A focus on marketing directly to homeowners sees James Hardie promote demand for its fiber cement-based products, emphasizing product value, durability, and design. The strategy to increase penetration and grow market share involves taking share from competing siding products seen as less durable or higher maintenance. Indeed, over the five years to 2022, the Census Bureau reports that fiber cement siding on newly built houses gained 3% market share in the US compared with vinyl (down 2%), stucco (up 2%), brick (down 2%), and wood (down 1%). Fiber cement siding was the siding of choice in 22% of all new US house completions in 2024. We estimate that James Hardie fiber cement siding is on about 8% of existing US houses.
Another growth initiative is targeted architectural products to appeal to higher-end markets, penetrate regions with different housing styles, and compete with costlier siding materials such as stucco and brick. This involves leveraging research and development into new products to better fit markets and/or improve margins. The firm’s primary R&R market is the US Northeast and Midwest, where the climate and house framing style suit traditional overlap siding, but newer products are targeted at other regions, such as a stucco-look product that competes in the predominantly stucco-clad Southwest.

Esther Holloway, Morningstar analyst

CF Industries Holdings

Morningstar Price/Fair Value: 0.86
Morningstar Uncertainty Rating: High
Morningstar Economic Moat Rating: Narrow
Industry: Agricultural Inputs

CF Industries is a leading producer and distributor of nitrogen, which is primarily used in fertilizers. The firm earns a narrow economic moat rating. Shares of its stock look 14% undervalued relative to our $140 fair value estimate.

CF Industries is the largest nitrogen producer in North America, with operations in the United States and Canada. CF’s plants, which benefit from low-cost North American natural gas, are connected to its main customers in the US Corn Belt by an extensive distribution network of pipelines, rail, and barge, giving the company a transportation cost advantage over foreign competition.
With roughly 80% of nitrogen sold as fertilizer, CF’s sales and profits are tied to US corn planted acreage. Nitrogen fertilizers are key to achieving higher yields in corn, as the crop, unlike soybeans, does not produce its own nitrogen. As a result, US corn-planted acres are a major driver of North American nitrogen demand.
CF’s largest plants are its Donaldsonville, Louisiana, and Port Neal, Iowa, locations. The company has the flexibility to shift production to the various nitrogen fertilizers, which allows it to produce based on market demand in any given year while retaining additional capacity to produce higher-margin industrial products. Donaldsonville’s seaborne location also allows CF to export products and take advantage of nitrogen demand in South America, a region that heavily imports nitrogen fertilizer.
On the cost side, natural gas is the main feedstock used in nitrogen fertilizer production. For CF, natural gas has historically accounted for a little more than 50% of ammonia production costs. Lower North American natural gas costs relative to the rest of the world have made CF and other North American producers more competitive against overseas rivals, which rely on higher-cost natural gas or coal-based feedstock. Urea is the general benchmark for all nitrogen fertilizers. Urea prices generally fall in line with marginal-cost producers that currently use European natural gas-based feedstock.
CF is also investing in carbon-free (blue and green) ammonia, which should see increased demand as a substitution for hydrogen fuel or as a cost-effective way to transport hydrogen. The company plans to produce this at existing plans. CF is building a new low-carbon ammonia plant in a joint venture project with JERA and Mitsui. CF will own 40% of the project.

Seth Goldstein, Morningstar senior analyst

CRH

Morningstar Price/Fair Value: 0.89
Morningstar Uncertainty Rating: Medium
Morningstar Economic Moat Rating: Narrow
Industry: Building Materials

CRH is a global manufacturer of a range of building products used in construction projects, operating via a vertically integrated business model. The firm earns a narrow economic moat rating, and the shares of its stock look 11% undervalued relative to our $96 fair value estimate.

CRH is a global supplier of building materials, with the majority of its revenue earned in North America. Infrastructure is CRH’s largest end market, representing 40% of group sales. As the largest roadbuilder in North America, CRH is well positioned to benefit from a 50% increase in funding for highway and road construction as part of the Infrastructure Investment and Jobs Act. CRH’s investment thesis hinges on rising US construction activity driven by funding certainty for US infrastructure projects and reshoring.
A combination of significant acquisitions and disposals during the past decade has seen CRH transform into a leading manufacturer of building materials. Divestitures of downstream activities and opportunistic acquisitions of assets, which include those shed for regulatory approval of the LafargeHolcim merger in 2015 as well as the acquisitions of US cement maker Ash Grove in 2018 and pending purchase of Arcosa in 2026, have increased CRH’s exposure to moatworthy upstream building activities. The shift in portfolio mix has coincided with 12 consecutive years of adjusted EBITDA margin expansion. CRH actively manages its portfolio, typically funding it with free cash and divestments.
Approximately 95% of CRH’s revenue comes from aggregates. Unlike pure plays that supply commodity products, such as cement and aggregates at high margins, CRH also uses these inputs to supply downstream finished goods with low additional capital investment. This has enabled CRH to grow its free cash flow to fund its acquisition strategy.
CRH targets 7% to 9% revenue growth between 2026 and 2030, split between organic and inorganic growth. Growth drivers include modernizing and upgrading aging road and water infrastructure in the US, as well as the onshoring of US manufacturing.
Regional markets mean companies are at the mercy of a region’s supply-and-demand dynamics. Approximately 75% of group EBITDA is from North America, of which 40% is from infrastructure that is publicly funded by the government and therefore tends to be more resilient across economic cycles. This is evident by US aggregate prices increasing in 31 of the last 34 years.

Matthew Donen, Morningstar director

Linde

Morningstar Price/Fair Value: 0.94
Morningstar Uncertainty Rating: Low
Morningstar Economic Moat Rating: Wide
Industry: Specialty Chemicals

Specialty chemicals company Linde rounds out our list of best basic materials stocks to buy. Linde is the largest industrial gas supplier in the world, with operations in over 100 countries. The stock is 6% undervalued relative to our fair value estimate of $540 per share.

Linde is the largest industrial gas producer in the world and benefits from operating in an industry with a very favorable structure. Despite selling products that are essentially commodities, industrial gas companies have consistently delivered lucrative returns thanks to their economic moats. Industrial gases typically account for a relative fraction of customers’ costs but are a vital input to ensure uninterrupted production. As such, customers are often willing to pay a premium and sign long-term contracts to ensure that their businesses are running smoothly. Long-term contracts and high switching costs contribute to industrial gas producers’ moats, helping them generate a relatively predictable cash flow stream and lucrative returns.
Demand for industrial gases is strongly correlated to industrial production, so organic revenue growth will largely depend on global economic conditions. That said, we think Linde can fuel additional revenue growth through investment in new projects or asset buybacks. Linde ended 2025 with a $10 billion backlog, 65% of which is related to clean energy projects. We expect the firm to capitalize on new blue and green hydrogen investment opportunities.
We think management has done a commendable job driving continued margin expansion since the Praxair-Linde merger. Compared with 2018, operating margins have improved by roughly 1,000 basis points in Asia-Pacific and 1,750 basis points in Europe, the Middle East, and Africa. Management aims to continue expanding margins by around 20-50 basis points annually.

Krzysztof Smalec, Morningstar analyst

How to Find More of the Best Basic Materials Stocks to Buy

Investors who’d like to extend their search for top basic materials stocks can do the following:

Review Morningstar’s comprehensive list of basic materials stocks to investigate further.
Stay up to date on the basic materials sector’s performance, key earnings reports, and more with Morningstar’s basic materials sector page.
Read Morningstar’s Guide to Stock Investing to learn how our approach to investing can inform your stock-picking process.
Use the Morningstar Investor screener to build a shortlist of basic materials stocks to research and watch.