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).
13. 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.
10. Dow Inc. (NYSE:DOW)
Number of Hedge Fund Holders: 43
Dow Inc. (NYSE:DOW) is a major global player in materials science and chemicals, providing products and solutions to various industries, including packaging and infrastructure. The company has a broad international presence and manufactures a wide array of chemical, plastic, and specialty materials. Its products are used in numerous applications such as food packaging, adhesives, paints, and construction materials. Dow’s operations are centered around three primary business segments: packaging and specialty plastics, industrial intermediates and infrastructure, and performance materials and coatings.
Dow Inc. (NYSE:DOW) recently reported mixed earnings for the second quarter of 2025. The company posted revenue of $10.1 billion, down over 7% from the same period last year. It is implementing short-term strategies aimed at boosting cash flow and earnings, with expectations of generating over $6 billion by 2026. It is also working to enhance profit margins and streamline its global portfolio, particularly in response to ongoing economic challenges, as shown by its recent actions related to its European operations.
Dow Inc. (NYSE:DOW) recently disappointed investors by reducing its dividend by 50%. However, the company returned $496 million to shareholders through dividends. It now offers a quarterly dividend of $0.35 per share and has a dividend yield of 5.56%, as of July 29.
9. Steel Dynamics, Inc. (NASDAQ:STLD)
Number of Hedge Fund Holders: 45
Steel Dynamics, Inc. (NASDAQ:STLD) ranks among the largest steel producers in North America. Its main operation centers around electric-arc furnace (EAF) steelmaking, which relies on recycled scrap metal as its primary input. This approach has a lower environmental footprint compared to traditional blast furnace methods and plays a key role in the company’s sustainability efforts.
Steel Dynamics, Inc. (NASDAQ:STLD) is now working to expand into recycled aluminum products, aiming to broaden its income sources and customer base. Vertical integration remains a priority, with many of its own facilities—such as fabrication shops— utilizing steel and materials produced internally. Initiatives like biocarbon use and circular manufacturing are also helping the company manage costs, stay compliant with regulations, and support growing customer demand for more sustainable supply chains.
Steel Dynamics, Inc. (NASDAQ:STLD) is a strong dividend payer with a robust cash position. In the most recent quarter, the company reported an operating cash flow of $302 million and paid $75 million in dividends. In addition, it has raised its payouts for 13 consecutive years, which makes it one of the best dividend stocks. The company pays a quarterly dividend of $0.50 per share and has a dividend yield of 1.57%, as of July 29.
8. International Flavors & Fragrances Inc. (NYSE:IFF)
Number of Hedge Fund Holders: 47
International Flavors & Fragrances Inc. (NYSE:IFF), headquartered in New York, is a diversified company with a strong presence in the taste, scent, nutrition, and health industries. Its acquisition of DuPont’s Nutrition & Biosciences division in 2021 significantly expanded its offerings to include enzymes, cultures, and texture solutions, strengthening its role as a key supplier to both established consumer goods companies and emerging food-tech firms.
Although International Flavors & Fragrances Inc. (NYSE:IFF) may not lead the sector in growth rates, its wide-ranging product portfolio and market presence give it a competitive edge. It goes beyond being a basic supplier, standing out as one of the few ingredient companies deeply involved in research and development.
In addition, International Flavors & Fragrances Inc. (NYSE:IFF) is a solid dividend company. Though the company does not have any dividend growth history, it has been making regular dividend payments to shareholders since 1972. Currently, it offers a quarterly dividend of $0.40 per share and has a dividend yield of 2.14%, as of July 29.
7. International Paper Company (NYSE:IP)
Number of Hedge Fund Holders: 49
International Paper Company (NYSE:IP) produces a wide range of paper and packaging products and also makes cellulose fibers, which are essential in products such as diapers, baby wipes, and feminine hygiene items.
For investors, International Paper Company (NYSE:IP) offers a relatively stable source of income, making it appealing to those who prefer steady, low-volatility investments. Around 54% of its sales come from processed food and beverage (34%) and fresh food (20%) markets. An additional 18% comes from the growing e-commerce and logistics sector, with the remaining revenue generated from durable and non-durable goods.
International Paper Company (NYSE:IP)’s management expects to generate between $2 billion and $2.5 billion in free cash flow by 2027 and intends to return 40% to 50% of that amount to shareholders through dividends. Based on the midpoint of these estimates, projected cash dividends in 2027 would total around $1.01 billion, a notable increase from the $643 million distributed in 2024.
International Paper Company (NYSE:IP) has paid uninterrupted dividends since 1986. The company currently offers a quarterly dividend of $0.4625 per share and has a dividend yield of 3.40%, as of July 29.
6. Nucor Corporation (NYSE:NUE)
Number of Hedge Fund Holders: 50
Nucor Corporation (NYSE:NUE) ranks among the top steel producers in North America. A key advantage of the company is its use of electric arc mini-mills, which are more adaptable than traditional blast furnaces used for making primary steel. This flexibility enables Nucor to adjust its production levels in response to market demand, helping it maintain strong profit margins throughout the ups and downs of the steel industry.
Nucor Corporation (NYSE:NUE) reported strong earnings in the second quarter of 2025. The company posted revenue of $8.46 billion, up nearly 5% from the same period last year. Its earnings increased across all three of its business segments compared to the previous quarter. The company also achieved a new safety record in the first half of 2025. Looking ahead to the remainder of the year, management expressed optimism, supported by steady demand in key markets, a solid order backlog, and new tax and trade policies that favor US manufacturing.
In addition, Nucor Corporation (NYSE:NUE) is a solid dividend payer. The company has increased its dividends for 52 consecutive years, which makes it one of the best dividend stocks in the materials sector. Currently, it pays a quarterly dividend of $0.55 per share and has a dividend yield of 1.55%, as of July 29.
5. Air Products and Chemicals, Inc. (NYSE:APD)
Number of Hedge Fund Holders: 60
Air Products and Chemicals, Inc. (NYSE:APD) provides industrial gases and chemicals to customers in around 50 countries. Its products support a wide range of sectors, including electronics, food and beverage, manufacturing, metals, and refining.
The global transition to clean energy is expected to be a major growth catalyst for Air Products and Chemicals, Inc. (NYSE:APD) in the years ahead. It is already the world’s leading supplier of hydrogen, which is gaining traction as a fuel source for vehicles like buses and trucks. In addition, the company is at the forefront of carbon capture and gasification technologies, which convert resources such as coal, high-sulfur liquids, and natural gas into syngas— a key component for producing chemicals, fuel, and energy.
Air Products and Chemicals, Inc. (NYSE:APD) has always grabbed the attention of income investors because of its consistent dividend policy. On July 18, the company declared a quarterly dividend of $1.79 per share, which was in line with its previous dividend. Overall, it has raised its payouts for 43 consecutive years. As of July 29, the stock has a dividend yield of 2.47%.
4. Ecolab Inc. (NYSE:ECL)
Number of Hedge Fund Holders: 63
Ecolab Inc. (NYSE:ECL) is recognized as a global leader in providing solutions for water management, sanitation, and pest elimination, serving millions of sites worldwide. Its services span a wide range of applications— from cooling water systems at data centers and recycling water in electronics manufacturing, to infection control in hospitals and sanitation and pest management for hotels and restaurants.
During Ecolab Inc. (NYSE:ECL)’s recent earnings call, management expressed confidence in achieving adjusted EPS growth of 12% to 15% through the remainder of 2025 and into 2026, while continuing to invest in core growth areas. They also reiterated their expectation of reaching an 18% operating income margin for the full year 2025, progressing toward a long-term target of 20% by 2027. Pricing is anticipated to stabilize around 3% in the third and fourth quarters, with the full impact of the trade surcharge factored in.
Ecolab Inc. (NYSE:ECL) is a strong dividend payer, having raised its payouts for 33 consecutive years. The company offers a quarterly dividend of $0.65 per share and has a dividend yield of 0.99%, as of July 29.
3. The Sherwin-Williams Company (NYSE:SHW)
Number of Hedge Fund Holders: 68
The Sherwin-Williams Company (NYSE:SHW) runs one of the largest networks of company-owned specialty paint stores in North America. Its offerings include architectural paints, industrial coatings, and specialty resins. In recent years, the company has focused on several key strategies, such as broadening its distribution network, investing in new product development, managing raw material and logistics expenses, strengthening its workforce, and ensuring adherence to environmental regulations.
The Sherwin-Williams Company (NYSE:SHW) recently reported earnings for the second quarter of 2025. The company posted revenue of $6.3 billion, up 1% from the same period last year. The revenue also beat analysts’ estimates by $20.33 million. Management noted that consolidated sales fell within the expected range, while the company achieved gross margin expansion for the twelfth straight quarter. However, due to weaker demand during the period— a trend that is likely to persist or even worsen in the latter half of the year— the company significantly ramped up its restructuring efforts. These actions led to pre-tax expenses totaling $59 million.
The Sherwin-Williams Company (NYSE:SHW) has been rewarding investors with growing dividends for the past 46 years, which makes it one of the best dividend stocks from the materials sector. The company offers a quarterly dividend of $0.79 per share and has a dividend yield of 0.95%, as of July 29.
2. Linde plc (NASDAQ:LIN)
Number of Hedge Fund Holders: 75
Linde plc (NASDAQ:LIN) holds the position as the leading industrial gas company globally, providing a wide variety of gases used across multiple industries. Its main operations center around atmospheric gases like oxygen and nitrogen, along with process gases such as carbon dioxide and hydrogen. The stock has surged by over 3% since the start of 2025.
In recent years, Linde plc (NASDAQ:LIN) has placed greater emphasis on clean energy initiatives and securing long-term contracts with clients. It has also advanced its technological capabilities, particularly in hydrogen technologies and specialized gas processing methods. The company’s broad global presence and exclusive technologies have played a significant role in driving its continued growth.
On July 29, Linde plc (NASDAQ:LIN) declared a quarterly dividend of $1.50 per share, which was in line with its previous dividend. The company has overall raised its payouts for 32 consecutive years. As of July 29, the stock supports a dividend yield of 1.29%.
1. CRH plc (NYSE:CRH)
Number of Hedge Fund Holders: 91
CRH plc (NYSE:CRH) is an Ireland-based building materials company that supplies materials and end-to-end services for construction across sectors like transportation, infrastructure, buildings, and outdoor spaces. In 2024, the company made around 40 acquisitions, spending roughly $5 billion.
Through CRH plc (NYSE:CRH), investors gain access to cement demand and US infrastructure growth, along with rising opportunities in developing countries like Brazil. In the US, CRH operates under the Ash Grove Cement name. The company has recently reached a deal to purchase Eco Material Technologies, a Utah-based company, for $2.1 billion. Eco Material specializes in ash-based supplementary cementitious materials and operates throughout North America. Its network includes over 125 utility sources, production sites, and terminals focused on fly ash, pozzolans, synthetic gypsum, and eco-friendly cement products.
The business will retain its name as Eco Material Technologies, a CRH Company, and its workforce of more than 1,100 employees will become part of the CRH organization.
CRH plc (NYSE:CRH) holds a solid dividend policy. The company has been paying uninterrupted dividends to shareholders since 1970. It currently offers a quarterly dividend of $0.37 per share and has a dividend yield of 1.53%, as of July 29.
While we acknowledge the potential of CRH to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than CRH and that has 100x upside potential, check out our report about this cheapest AI stock.
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