10 Large Cap Materials Stocks of October 2022; Are They Halal?

10 Large Cap Materials Stocks of October 2022!

The materials sector includes companies that discover, manufacture, and produce the raw materials that make production possible globally, such as concrete, metal, plastic, chemicals, and paper. 

Economic conditions like inflation, rising interest rates, and supply chain difficulties significantly impact the materials sector’s performance. In February 2022, the war between Russia and Ukraine disrupted the global supply chain for materials, and the supply issue simultaneously drove up materials prices. Even though materials have had a volatile year in 2022, investors are still betting big and are continuously bullish on the materials industry.

If you are also thinking about adding materials stocks to your portfolio, you must have struggled with a wide range of options. Forbes Advisor has selected the profiles of the 10 largest materials stocks by total market capitalization, along with a look at their most recent performance for your preference. And we will share the halal status of these 10 materials stocks. 

Shariah Compliant Materials Stocks

To get the best return on your investment, you must analyze the performance of any stock earlier and during the financial crisis. Most stocks perform poorly during critical economic situations and crises. However, some studies found that Shariah-compliant stocks perform better during the Covid 19 pandemic.

Below are the details of the 10 largest materials stocks with their Shariah-compliant status according to Musaffa halal stock screener.

 Company NamesMarket Cap5-Year Avg. Annualized Return10-Year Avg. Annualized ReturnShariah Compliance Status
Linde PLC (LIN)  $137 billion15.7%11.4%Halal
BHP Group Ltd (BHP)  $131 billion13.6%2.9%Halal
Rio Tinto PLC (RIO)  $92 billion12.6%8%Halal
Glencore PLC (GLNCY)  $71 billion6.5%2.4%Not Halal
Vale SA (VALE)  $68 billion13.7%2.5%Halal
Air Liquide SA (AIQUY)  $60 billion4.7%5%Halal
Sherwin-Williams Co (SHW)$56 billion12.3%16%Halal
Air Products & Chemicals Inc (APD)  $53 billion11.6%13.4%Halal
Shin-Etsu Chemical Co Ltd (SHECY)  $43 billion4.7%8%Not Halal
Ecolab Inc (ECL)  $42.5 billion4%9.8%Halal
*Data as of October 3, 2022

Advantages of Materials stocks: Cash flow and higher dividends

As people need materials to build any product, there is always a demand, no matter the economic situation. Especially the demand for essential materials used in healthcare, food, etc, is always there.  Moreover, the materials industry is a good option if you’re looking for cash dividends, and materials stocks tend to pay higher average dividend rates than other industries.

Disadvantages of Materials stocks: vulnerability to global economic issues and less innovation

One of the main disadvantages of materials stocks is that they are more vulnerable to the global economy, international politics, and fluctuating demand—for example, tariffs that lead to higher prices or border issues that delay sales. Meanwhile, this sector usually has fewer innovation and growth opportunities, and stock prices do not rapidly increase like technology.

You must be wondering how to check the halal status of the stocks so you can invest in the halal way. Also, you might be questioning how the halal status of the materials stocks presented in this article is analyzed. Musaffa Halal Stock Screener helps you to check the Shariah-compliant status of the stocks globally. The platform also gives you the breakdown of the halal screening analysis, so you understand the reason behind the compliant status of the stock. Sign up for Musaffa Halal Stock Screener to discover more halal stocks in the stock universe.

Please visit our academy to read more about Islamic finance and halal investment-related topics.