Are Basic Materials Stocks Lagging Sensient Technologies (SXT) This Year?

The Basic Materials group has plenty of great stocks, but investors should always be looking for companies that are outperforming their peers. Sensient Technologies (SXT) is a stock that can certainly grab the attention of many investors, but do its recent returns compare favorably to the sector as a whole? Let's take a closer look at the stock's year-to-date performance to find out.

Sensient Technologies is one of 275 individual stocks in the Basic Materials sector. Collectively, these companies sit at #14 in the Zacks Sector Rank. The Zacks Sector Rank gauges the strength of our 16 individual sector groups by measuring the average Zacks Rank of the individual stocks within the groups.

The Zacks Rank emphasizes earnings estimates and estimate revisions to find stocks with improving earnings outlooks. This system has a long record of success, and these stocks tend to be on track to beat the market over the next one to three months. Sensient Technologies is currently sporting a Zacks Rank of #1 (Strong Buy).

Within the past quarter, the Zacks Consensus Estimate for SXT's full-year earnings has moved 7.7% higher. This means that analyst sentiment is stronger and the stock's earnings outlook is improving.

Based on the most recent data, SXT has returned 33% so far this year. In comparison, Basic Materials companies have returned an average of 7.9%. As we can see, Sensient Technologies is performing better than its sector in the calendar year.

Another Basic Materials stock, which has outperformed the sector so far this year, is Reliance (RS). The stock has returned 40% year-to-date.

For Reliance, the consensus EPS estimate for the current year has increased 6.8% over the past three months. The stock currently has a Zacks Rank #2 (Buy).

Breaking things down more, Sensient Technologies is a member of the Chemical - Specialty industry, which includes 46 individual companies and currently sits at #86 in the Zacks Industry Rank. Stocks in this group have gained about 10.4% so far this year, so SXT is performing better this group in terms of year-to-date returns.

In contrast, Reliance falls under the Mining - Miscellaneous industry. Currently, this industry has 85 stocks and is ranked #205. Since the beginning of the year, the industry has moved +12.3%.

Going forward, investors interested in Basic Materials stocks should continue to pay close attention to Sensient Technologies and Reliance as they could maintain their solid performance.

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This article originally published on Zacks Investment Research (zacks.com).

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