5 Best US Chemical Stocks To Buy Now

In this article, we discuss 5 best US chemical stocks to buy now. If you want to see more stocks in this selection, check out 12 Best US Chemical Stocks To Buy Now. 

5. PPG Industries, Inc. (NYSE:PPG)

Number of Hedge Fund Holders: 31

PPG Industries, Inc. (NYSE:PPG) is headquartered in Pittsburgh, Pennsylvania. The company manufactures and distributes paints, coatings, and specialty materials worldwide. It is also involved in packaging and chemical management services for commercial, military, regional jets, and general aviation aircrafts. PPG Industries, Inc. (NYSE:PPG) is one of the best chemical stocks to invest in. 

On January 19, PPG Industries, Inc. (NYSE:PPG) reported a Q4 non-GAAP EPS of $1.22 and a revenue of $4.19 billion, outperforming Wall Street estimates by $0.09 and $70 million, respectively. Deutsche Bank analyst David Begleiter on January 23 raised the firm’s price target on PPG Industries, Inc. (NYSE:PPG) to $145 from $128 and kept a Buy rating on the shares following the Q4 results.

According to Insider Monkey’s fourth quarter database, 31 hedge funds were long PPG Industries, Inc. (NYSE:PPG), compared to 34 funds in the prior quarter. Jean-Marie Eveillard’s First Eagle Investment Management is the largest stakeholder of the company. 

Here is what ClearBridge Investments Large Cap Value Strategy has to say about PPG Industries, Inc. (NYSE:PPG) in its Q1 2022 investor letter:

“While commodities-exposed areas of the materials sector such as mining and steel fared well in the quarter, we tend to have less direct exposure to commodities across our portfolio. Holdings like paint and coating company PPG Industries (NYSE:PPG) that use natural gas and oil related products as feedstock into their products faced sharp input cost escalation, driving meaningful margin compression, which was not well-received by investors. While negative in the short term, we remain confident that the company will be able to adjust pricing accordingly and recover margins over the medium term.”

4. Eastman Chemical Company (NYSE:EMN)

Number of Hedge Fund Holders: 32

Eastman Chemical Company (NYSE:EMN) was founded in 1920 and is headquartered in Kingsport, Tennessee. It is a specialty chemicals company in the United States and internationally, and operates through Additives & Functional Products, Advanced Materials, Chemical Intermediates, and Fibers segments. On February 14, Eastman Chemical Company (NYSE:EMN) declared a quarterly dividend of $0.79 per share, in line with previous. The dividend is payable on April 10, to shareholders of record on March 15. It is one of the best chemical stocks to invest in. 

On January 30, Barclays analyst Michael Leithead raised the firm’s price target on Eastman Chemical Company (NYSE:EMN) to $87 from $82 and kept an Equal Weight rating on the shares following the Q4 results.

According to Insider Monkey’s fourth quarter database, 32 hedge funds were bullish on Eastman Chemical Company (NYSE:EMN), and Two Sigma Advisors held a prominent stake in the company, comprising 679,600 shares worth $55.3 million. 

3. Univar Solutions Inc. (NYSE:UNVR)

Number of Hedge Fund Holders: 40

Univar Solutions Inc. (NYSE:UNVR) was founded in 1924 and is headquartered in Downers Grove, Illinois. It manufactures and markets commodity and specialty chemical products worldwide. The company provides epoxy resins, polyurethanes, titanium dioxide, fumed silica, esters, plasticizers, silicones, and specialty amines. Univar Solutions Inc. (NYSE:UNVR) is one of the best chemical stocks to monitor. 

On March 14, Barclays analyst Michael Leithead increased Univar Solutions Inc. (NYSE:UNVR)’s price target from $33 to $36 and maintained an Equal Weight rating on the stock after the announcement of the company’s acquisition by Apollo Global. The analyst believes that the deal is a good outcome for Univar Solutions Inc. (NYSE:UNVR) shareholders and does not anticipate any higher offers for the company.

According to Insider Monkey’s fourth quarter database, 40 hedge funds were long Univar Solutions Inc. (NYSE:UNVR), compared to 31 funds in the prior quarter. First Pacific Advisors is the biggest stakeholder of the company. 

Rhizome Partners made the following comment about Univar Solutions Inc. (NYSE:UNVR) in its Q3 2022 investor letter:

“Univar Solutions Inc. (NYSE:UNVR) reported a 30.2% increase in revenue and a 52.7% increase in adjusted EBITDA during the second quarter. The company provided positive earnings guidance for the third quarter 2022 and for the full year. For the year 2022, free cash flow guidance was in the range of $400 to $450 million. At quarter-end, the stock was trading at 8.4 to 9.5 times price-to-free-cash-flow multiple. Univar’s guidance also projects specialty chemical growth 2% higher than economic consensus as well as productivity improvements through organization. The company expects leverage to be between 2.0 and 2.5 times net debt to EBITDA and will return 20% to 30% of adjusted net income to shareholders. The company shrank its share count by 1.7% in six months and has the authorization to buy back 9.1% of the shares outstanding.”

2. Air Products and Chemicals, Inc. (NYSE:APD)

Number of Hedge Fund Holders: 41

Air Products and Chemicals, Inc. (NYSE:APD) is headquartered in Allentown, Pennsylvania, and it provides atmospheric gasses, process and specialty gasses, equipment, and related services in the Americas, Asia, Europe, the Middle East, India, and internationally. Air Products and Chemicals, Inc. (NYSE:APD) serves the refining, chemical, manufacturing, electronics, magnetic resonance imaging, energy production, medical, food, and metals industries. It is one of the best chemical stocks to consider. 

On March 6, Air Products and Chemicals, Inc. (NYSE:APD) effectively launched its registered green bond offerings that consist of two parts. The first part is $600 million of fixed-rate notes that are U.S. dollar-denominated and due in 2033. The second part is €700 million of fixed-rate notes that are euro-denominated and due in 2035.

Evercore ISI analyst Stephen Richardson on March 7 raised the firm’s price target on Air Products and Chemicals, Inc. (NYSE:APD) to $305 from $295 and kept an In Line rating on the shares, and the stock has been added to the firm’s “Tactical Outperform” list. Despite underperforming its peer Linde plc (NYSE:LIN) by 16% in February after Q4 prints, Air Products and Chemicals, Inc. (NYSE:APD) now trades at a discount of three times its valuation. The analyst believes that the company’s base industrial gas business will continue to produce positive results through 2025.

According to Insider Monkey’s fourth quarter database, 41 hedge funds were long Air Products and Chemicals, Inc. (NYSE:APD), compared to 43 funds in the earlier quarter. Phill Gross and Robert Atchinson’s Adage Capital Management is a prominent stakeholder of the company, with 225,640 shares worth $69.5 million. 

ClearBridge Large Cap Value Strategy made the following comment about Air Products and Chemicals, Inc. (NYSE:APD) in its Q4 2022 investor letter:

“In the materials sector, Air Products and Chemicals, Inc. (NYSE:APD)’s ability to recover higher energy costs, particularly in Europe as it continues to execute on its growth projects, has helped it to generate a positive return for the year and made it a strong contributor. The capital APD is deploying into hydrogen products globally is finally getting noticed as Europe is looking to diversify away from Russian natural gas and the Inflation Reduction Act (IRA) benefits domestic investments in renewables, such as APD’s $4.5 billion blue hydrogen project in Louisiana and its $4 billion green hydrogen production facility in Texas. APD is also teaming up with World Energy to build a $2.5 billion sustainable aviation fuel production facility in Southern California, a project that should also benefit from the IRA.”

1. Dow Inc. (NYSE:DOW)

Number of Hedge Fund Holders: 45

Dow Inc. (NYSE:DOW) is headquartered in Midland, Michigan, and the company provides materials science solutions for packaging, infrastructure, mobility, and consumer applications worldwide. It operates through Packaging & Specialty Plastics, Industrial Intermediates & Infrastructure, and Performance Materials & Coatings segments. On March 1, Dow Inc. (NYSE:DOW) and X-energy, a company focused on environmentally friendly fuel technology, revealed their intention to collaborate on the creation and showcasing of the initial industrial scale advanced nuclear reactor for a North American location. It is one of the best chemical stocks to invest in. 

On February 6, Credit Suisse analyst Matthew Skowronski double upgraded Dow Inc. (NYSE:DOW) to Outperform from Underperform with a $68 price target. The analyst predicts that earnings in 2023 will be at their lowest point due to new capacity affecting pricing and margins in various derivatives. Despite concerns over a possible decrease in demand in 2023, Skowronski believes that Dow Inc. (NYSE:DOW)’s risk/reward ratio for higher demand in 2024 for several of Dow’s commodities is in favor of the company.

According to Insider Monkey’s fourth quarter database, 45 hedge funds were bullish on Dow Inc. (NYSE:DOW), compared to 43 funds in the prior quarter. Richard S. Pzena’s Pzena Investment Management is the biggest investor in the company. 

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