In this article, we will take a look at some of the best dividend stocks from the materials sector.
The materials sector plays a key role in supplying essential components used in everyday products, making it a significant area for investors to understand. Since demand for materials typically rises and falls with the economy, companies in this sector are especially vulnerable to economic fluctuations. When the economy slows, demand for raw materials often drops, leading to lower prices and reduced earnings for producers.
However, the economy isn’t the only factor influencing this sector. Issues like supply chain disruptions, regulatory changes, and inflation can also impact demand, pricing, and overall profitability across the industry. The materials sector showed modest but positive performance in 2024, though its momentum was dampened by persistent concerns over the US economy, slowing growth in China, and elevated global interest rates.
According to a report by Fidelity Investments, looking ahead to 2025 and beyond, this cyclical sector will likely continue to reflect broader economic trends in the US and worldwide. Should interest rates keep trending downward—as has begun in several major markets— it may trigger a fresh wave of growth that could boost material stocks. Still, even without strong support from broader economic conditions, certain areas within the sector appear to offer promising opportunities, thanks to favorable shifts in supply and demand.
Given this, we will take a look at some of the best dividend stocks in the materials sector.
Photo by lucas Favre on Unsplash
Our Methodology
For this article, we first used a Finviz screener to identify dividend-paying stocks in the basic materials sector. From the resultant dataset, we picked 13 stocks with the highest number of hedge fund investors, as per Insider Monkey’s database of 1,000 hedge funds, as of Q1 2025.
Why are we interested in the stocks that hedge funds pile into? 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).
14. Southern Copper Corporation (NYSE:SCCO)
Number of Hedge Fund Holders: 34
Southern Copper Corporation (NYSE:SCCO) ranks among the world’s biggest integrated copper producers, with mining operations in Mexico and Peru. The company expects substantial growth in output over the coming years. Its board has already approved projects that are set to increase production by 156,000 tons by 2027. In addition, several other projects in development could boost annual output by another 545,000 tons by 2032.
With its strong pipeline for copper expansion and efficient cost structure, Southern Copper Corporation (NYSE:SCCO) is well-positioned to benefit from increasing demand in the global market.
Southern Copper Corporation (NYSE:SCCO) is among the best dividend stocks on our list as the company has paid regular dividends to shareholders for 28 consecutive years. The company currently offers a quarterly dividend of $0.80 per share and has a dividend yield of 2.96%, as of July 29.
12. Wheaton Precious Metals Corp. (NYSE:WPM)
Number of Hedge Fund Holders: 35
Wheaton Precious Metals Corp. (NYSE:WPM) is a Canadian multinational precious metals streaming company. The company holds a diverse range of streaming agreements that allow it to purchase gold, silver, palladium, and cobalt from several major mining firms. These agreements cover both active mining operations and projects still under development. The inclusion of future projects gives Wheaton strong growth potential, with the company aiming to expand its output by 40% over the next five years.
In its earnings for the first quarter of 2025, Wheaton Precious Metals Corp. (NYSE:WPM) has maintained its 2025 production outlook, expecting between 600,000 and 670,000 gold equivalent ounces (GEOs). Output from the Salobo mine is expected to stay steady, backed by operational enhancements across all three phases of the project. Production at Antamina is anticipated to rise in the second half of 2025, driven by improved silver grades.
Looking ahead, Wheaton Precious Metals Corp. (NYSE:WPM) forecasts its annual production to grow by around 40%, reaching approximately 870,000 GEOs by 2029. In addition, the company is a strong dividend payer. It currently offers a quarterly dividend of $0.165 per share, having raised it by 6.5% in March. The stock has a dividend yield of 0.71%, as of July 29.
11. PPG Industries, Inc. (NYSE:PPG)
Number of Hedge Fund Holders: 38
PPG Industries, Inc. (NYSE:PPG) supplies its customers with paints, coatings, and specialized materials. The company provides products and services to customers across the construction, consumer goods, industrial, transportation, and aftermarket sectors.
PPG Industries, Inc. (NYSE:PPG) reported strong results in its recently announced Q2 2025 earnings. The company posted a 2% organic sales growth, driven equally by higher sales volumes and increased selling prices. This growth highlighted the strength of the company’s product portfolio and effective commercial strategies across its global operations, even as the broader economic environment remained dynamic. The Performance Coatings segment posted record quarterly sales and earnings, with a 6% rise in organic sales supported by strong demand for its advanced technology offerings. In the Industrial Coatings segment, sales volumes held steady after several quarters of decline, reflecting early gains in market share.
PPG Industries, Inc. (NYSE:PPG)’s cash position also remained strong. The company generated $369 million in operating cash flow and ended the quarter with $1.6 billion in cash and short-term investments. During the quarter, it returned $308 million to shareholders through dividends. PPG has been raising its dividends for 54 consecutive years and currently offers a quarterly dividend of $0.71 per share. With a dividend yield of 2.53%, as of July 29, PPG is among the best dividend stocks from the materials sector.
