These days, everyday items like Velcro and fiberglass insulation don’t strike the average person as advanced materials. However, when they first hit the market in the 20th century, they had revolutionary impacts on several industries that made their inventors rich. Nowadays, investors can get in on these industry-shaping inventions by investing in advanced materials stocks.
Whether for agricultural applications or industrial, these novel materials can rapidly increase a company’s growth prospects, thus increasing its stock value. The key to picking the right companies is understanding how these products fit into their broader financial picture and whether or not they’ll have enough impact to catch Wall Street’s attention.
Ultimately, investing in advanced material stocks has the advantage of potentially increasing an investor’s portfolio faster than the market average, with less speculative risk. That’s because many companies developing these advanced materials are industry stalwarts with long histories and deep pockets to help stabilize their share value.
BASF (BASFY)
A global giant in the chemical industry, BASF (OTCMKTS:BASFY) has been innovating in chemical and material products for roughly 150 years. One of its primary branches for seeking out external sources of innovation is Chemovator. This branch actively funds the development of start-up chemical manufacturers and then gains access to the technology and its profits if it succeeds.
One exciting example of this branch at work is its recent investment in a small chemical company called Heartland. This came as a result of Heartland developing a hemp-based material used as an additive in plastic compounds. With this breakthrough advancement, plastic materials can improve properties such as flammability, bonding, dispersion, and bulk density, which typically come from natural fibers.
For investors, buying into BASF means continuous exposure to up-and-coming advanced materials which could improve the trajectory potential of BASF stock.
3M (MMM)
We’re all familiar with 3M (NYSE:MMM) and its material products like adhesives, but one extra ace up its sleeve is the constant research it funds for advanced materials. The company currently sells 356 products under its advanced materials product line. These include everything from industrial-grade chemicals for research applications to chopped fiberglass for construction.
Moreover, the company invests about 5.9% of its sales back into research and development. This investing approach has helped the company produce over 3,500 patents annually and create a steady stream of unique products for customers.
As a result, investors in 3M benefit from the company’s stability alongside its innovative potential. This combination makes 3M one of the best advanced materials stocks since the company is constantly innovating in order to keep a grip on the materials market.
DuPont de Nemours (DD)
As a multilevel and multinational conglomerate of some of the world’s most prominent material companies, DuPont de Nemours (NYSE:DD) has the pockets for advanced research and the experience to make it successful. From hydrogen and fuel cell research to non-stick coatings and even Kevlar, DD’s products are involved in every industry around the world in some way or another.
Like BASF, the company focuses on acquiring outside intellectual property and innovation to stay ahead of the competition. Where it differs, however, is its sheer size and exceptional stability over time.
Thus, for investors looking for a legacy blue-chip company through which to invest, DD represents a strong opportunity while still showing serious potential for long-term growth. This is due to its expansive product portfolio and critical position in the industrial process for almost the whole world.
On the date of publication, Viktor Zarev did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
