President Trump is looking to place 25% tariffs on goods from Canada and Mexico and this could negatively influence US industries and critical sectors beyond just autos. According to a report by CNBC in January 2025 by Lori Ann LaRocco, Canada is the largest partner with the US for critical chemicals.
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The US chemicals industry also exports a huge amount of products to Canada. In 2023, US firms sold over $28 billion in chemicals to Canadian customers. On the other hand, Canadian partners export approximately $25 billion in chemicals to the US annually, as per the American Chemistry Council.
Texas, California, Louisiana, North Carolina, Illinois, Ohio, Indiana, New York, Pennsylvania, and Iowa are the top chemical-producing states and they account for about 66% of total US chemical production while the rest of the chemicals are imported. According to the American Chemical Council, Canada is the leading source of chemical imports to the US and accounted for 18.1% of the total chemical imports in 2023. Canada is followed by China and South Korea.
Eric Byer, CEO of the Alliance for Chemical Distribution, pointed out that if there is a trade war between Canada and the US, the price of critical chemicals could lead to inflationary pressures on US consumers and industries. According to Byer, Canada exports approximately 80% of the chlorine used in disinfecting drinking water for the West Coast states. He also pointed out that the US exports large amounts of phenol to Canada for use in the wood products industry. Some of that treated lumber is then also exported back into the US from Canada for domestic consumption and home construction purposes.
The US-Canada chemical trade relationship supports other industries as well and disruption of this trade between the two countries could have far-reaching consequences.
With this background in mind, let’s take a look at the 11 undervalued chemical stocks to buy now.
A close up view of a specialized chemical compound in the lab.
Our Methodology
To compile our list of the 11 undervalued chemical stocks to buy now, we looked for the largest chemical companies. We reviewed our own rankings, financial media reports, ETFs, and various online resources to compile a list of the best chemical stocks. To find undervalued chemical stocks, we narrowed down our selection by looking for stocks trading at under 20 times their forward earnings as of March 28, 2025. Next, we focused on the top 11 undervalued chemical stocks most favored by institutional investors. Data for the hedge fund sentiment surrounding each stock was taken from Insider Monkey’s Q4 2024 database of more than 1,000 elite hedge funds. Finally, the 11 undervalued chemical stocks to buy were ranked in ascending order based on the number of hedge funds holding stakes in them as of Q4 2024.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
11 Undervalued Chemical Stocks to Buy Now
11. Methanex Corporation (NASDAQ:MEOH)
Forward P/E: 8.05
Number of Hedge Fund Holders: 27
Methanex Corporation (NASDAQ:MEOH) is a Canadian chemical company that ranks among the best-undervalued chemical stocks to invest in. It is the largest methanol producer in the world and it supplies methanol to major international markets in North America, Asia Pacific, Europe, and South America. The company has production sites in Canada, Chile, Egypt, New Zealand, Trinidad and Tobago, and the United States. Methanex Corporation (NASDAQ:MEOH) has an extensive global supply chain of terminals, storage facilities, and the largest fleet of dedicated methanol ocean tankers in the world.
The company is making moves to strengthen its leadership in the methanol industry. In September 2024, Methanex Corporation (NASDAQ:MEOH) announced that it has entered into a definitive agreement to acquire OCI Global’s international methanol business for $2.05 billion. The deal includes OCI’s interest in two major methanol facilities in Beaumont, Texas. One of these facilities also produces ammonia. Methanex Corporation (NASDAQ:MEOH) will also acquire a low-carbon methanol production and marketing business and a currently idle methanol facility in the Netherlands. The two highly attractive methanol assets in Beaumont benefit from access to North America’s abundant and favourably-priced supply of natural gas feedstock. This transaction is expected to increase the company’s global methanol production by over 20%. Additionally, Methanex Corporation (NASDAQ:MEOH) expects to achieve approximately $30 million of annual cost synergies through reduced logistics costs and lower selling, general, and administrative expenses.
10. Green Plains Inc. (NASDAQ:GPRE)
Forward P/E: 9.52
Number of Hedge Fund Holders: 29
Green Plains Inc. (NASDAQ:GPRE) is an American chemical and biorefining company that specializes in the development and utilization of fermentation, agricultural, and biological technologies in the processing of annually renewable crops into value-added ingredients. The company is also one of the largest producers of ethanol in the US. It also produces high-protein ingredients for animal and aquaculture diets. Green Plains Inc. (NASDAQ:GPRE) ranks among the best chemical stocks to invest in.
The company is taking steps to optimize operations and reduce costs. In its Q4 2024 earnings call, Green Plains Inc.’s (NASDAQ:GPRE) management pointed out that they have identified $50 million in annualized cost savings and the company has executed on the first $30 million of improvements already. As part of this strategy, in January 2025, Green Plains Inc. (NASDAQ:GPRE) decided to shut down its Fairmont, Minnesota facility as it navigates challenging market conditions. On March 17, 2025, the company also announced that it has decided to temporarily idle its Clean Sugar Technology facility in Shenandoah, Iowa. This move is part of Green Plains Inc.’s (NASDAQ:GPRE) strategy to optimize its product mix to maximize returns. The company believes this presents an opportunity to further refine the dextrose production process while continuing to build significant commercial interest.