How to Invest in Materials
Last updated July 2026
Short answer
You can invest in Materials by buying the individual stocks that fit the thesis (APD, DD, DOW), holding an ETF proxy, or building a focused Materials portfolio. Materials companies supply the physical inputs everything else is made from: industrial gases, coatings and specialty chemicals, cement and aggregates, and industrial metals. The sector splits sharply on pricing power. Industrial gases and aggregates enjoy local near-monopolies and long contracts, so they behave almost like infrastructure. Commodity chemicals and metals are price takers whose margins swing with the cycle.
What gets a stock into the Materials theme?
Revenue from producing industrial gases, chemicals, coatings, construction aggregates, or industrial metals used as inputs to other industries.
What stocks are in the Materials theme?
Every public name that fits the Materials thesis, with the rationale for inclusion. Click any ticker for the full stock guide. The portfolio above starts equal-weighted; you set your own target weights inside Walnut.
Third-largest industrial gases company. Aggressive large-scale hydrogen infrastructure strategy (NEOM, Louisiana).
Diversified specialty materials. Separating into three companies (Electronics, Water, Industrial) by 2026.
Dow Inc., through its subsidiaries, provides various materials science solutions for packaging, infrastructure, mobility, and consumer applications in the United States, Canada, Europe, the Middle East, Africa, India, the Asia.
Ecolab is the global leader in water treatment, hygiene, and infection-prevention solutions, serving customers across foodservice, hospitality, healthcare, food and beverage proces
One of the world's largest copper producers, with byproduct gold; a cyclical, commodity-leveraged bet on copper and the energy transition.
Largest industrial gases company worldwide. Take-or-pay contracts produce extremely stable cash flow.
Second-largest US aggregates producer plus a strong Texas cement franchise.
Largest US steel producer using EAF technology. 51+ consecutive years of dividend growth.
PPG Industries is a global leader in coatings and specialty materials, meaning it manufactures paints, coatings, and finishes rather than end products.
Paint and coatings giant with a company-owned store moat and a long dividend-growth record; a quality compounder.
Largest US construction aggregates producer. Federal infrastructure spending tailwind.
For the full roundup of the individual names in this theme, grouped by the role each one plays, read best materials stocks.
The bottom line on Materials
Materials is best expressed as a focused basket of the names that actually fit the thesis rather than a diluted sector ETF. Core names include APD, DD, DOW. In a portfolio it works as a satellite tilt you size deliberately, not a core holding.
FAQ
Are materials stocks cyclical?
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Most are, because demand comes from construction, autos and manufacturing, which fall in a downturn. But the sector is not uniform: industrial gas suppliers sign fifteen-year on-site contracts and aggregates producers hold local monopolies on heavy, expensive-to-transport rock. Those behave far more defensively than commodity chemicals or metals.
Why are industrial gases such good businesses?
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Gases are costly to transport relative to their value, so suppliers build production at or beside the customer's plant under contracts running fifteen years or more. Once built, no competitor can economically serve that site. The result is local near-monopolies with contracted volumes and energy costs passed through.
Why do aggregates companies have pricing power?
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Crushed stone and sand are heavy and cheap, so transport quickly costs more than the material. That makes quarries local monopolies within a delivery radius, and permitting new ones is difficult. Producers can generally raise prices with inflation, which is unusual for a commodity business.
What drives materials stocks?
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Construction and infrastructure spending, industrial production, and for the commodity end, global metal and chemical prices set largely by Chinese demand and supply. Energy is a major input cost across the sector, so oil and gas prices feed through to margins.
What are the risks of materials stocks?
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Economic cyclicality is the largest. Then energy costs, which are a direct input. Chinese overcapacity in chemicals and metals, which has repeatedly depressed global prices. Environmental regulation and carbon costs, which fall heaviest on the emissions-intensive producers. And for commodity businesses, no pricing power when demand weakens.
How is materials different from mining?
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Mining extracts raw ore. Materials is broader and sits further downstream, including the chemicals, gases, coatings and aggregates made from processed inputs. The two overlap where a company both mines and processes, but a specialty chemicals business has almost nothing in common with a copper miner economically.
Does Walnut recommend which materials stocks to buy?
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No. Walnut is not a registered investment adviser. It lets you build a materials portfolio from names you choose, weight the defensive gas and aggregates businesses against the cyclical commodity ones, and approve every trade yourself at your own broker.
Build the Materials portfolio in Walnut
Walnut's AI assistant takes the thesis above, proposes 5 to 6 constituents with target weights, and lets you fund the portfolio through your existing broker. You approve every order; we never trade on your behalf.
Other themes
- AI infrastructure. Picks and shovels of the AI buildout: GPUs, networking, foundries, and the software platforms training the largest models.
- Data center power and cooling. The grid, switchgear, liquid cooling, and electrical contracting that AI data centers can't run without.
- Semiconductors. The full chip stack: designers, foundries, equipment makers, materials suppliers, and packaging specialists.
- Defense and modernization. Software, sensors, and specialty materials at the center of US and allied defense buildouts.
- Critical materials. Rare earths, specialty metals, and strategic materials at the center of supply chain reshoring.
Walnut is informational, not investment advice. Theme membership is descriptive, not prescriptive; nothing on this page should be read as a recommendation. Always verify current financials and your own circumstances before investing.