A few weeks ago Peter Ashton of Recognia examined Material Stocks or chemical and packaging companies. Companies which add value to raw materials, as the economy continues to grow one would expect volumes to grow. The more the volume, the less expensive it is to produce whatever they produce. Mr. Ashton criteria was:

minimum capitalization of $ 2.5 billion   (capitalization is number of shares x market price of stock)

companies with forward price to earnings (P/E) ratios of less than 18

companies with a price-to-sales ratio of less than 1.5

dividend yield of greater than 1.5%

Company                                   Market Cap                    Price/Sales             Forward            Dividend

(US $ Bil)                        Ratio                        P/E Ratio            Yield

LyondellBassell Ind                 35.7                                 1.19                            9.6                        3.7

International Paper                  20.8                                1.04                          15.4                        3.5

Huntsman Corp                            5.3                                0.47                         14.6                         2.2

Eastman Chemical                    11.3                                 1.23                          11.7                          2.5

Dow Chemical                            77.3                                1.44                          17.6                          2.9

PolyOne Corp                                2.7                               0.79                          16.0                          1.5

Graphic Packaging                       4.1                              0.91                           17.8                           1.9

Cabot Corp                                       3.6                             1.3                              17.3                           2.0

Linking to dividend paying stocks, all the stocks pay a dividend and what is easy for your research is by varying the criteria you will either add or subtract companies from your list. The materials companies are very dependent on price of the raw material, so you may wish to factor that into your analysis, however they tend to dependable in generating constant revenue streams. All stocks go up and down and perhaps there could be some of these types of companies in your holdings.

There are more questions than answers, till the next time – to raising questions.