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Materials sector overvalued but mining stocks show strong quality and recent gains

Market News
15 Aug 2026
Seeking Alpha
View Source
Neutral
Materials sector overvalued but mining stocks show strong quality and recent gains

The materials sector is currently overvalued compared to its 11-year average, with mining and metals stocks being the most overpriced. However, these stocks have high quality scores which partly offset valuation concerns. The iShares Global Materials ETF (MXI) offers diversified exposure with less company-specific risk than the U.S.-focused XLB ETF, and has outperformed XLB by 10.1% in the past year mainly due to mining strength. Despite this recent outperformance, MXI has lagged XLB since 2006 in total returns and risk metrics. Investors may find value in five stocks within the sector that are cheaper than their peers.

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