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Is BHP Group Limited (BHP) Stock Outpacing Its Basic Materials Peers This Year?

The Basic Materials group has plenty of great stocks, but investors should always be looking for companies that are outperforming their peers. Is BHP (BHP) one of those stocks right now? A quick glance at the company's year-to-date performance in comparison to the rest of the Basic Materials sector should help us answer this question.

BHP is a member of our Basic Materials group, which includes 239 different companies and currently sits at #5 in the Zacks Sector Rank. The Zacks Sector Rank gauges the strength of our 16 individual sector groups by measuring the average Zacks Rank of the individual stocks within the groups.

The Zacks Rank is a proven system that emphasizes earnings estimates and estimate revisions, highlighting a variety of stocks that are displaying the right characteristics to beat the market over the next one to three months. BHP is currently sporting a Zacks Rank of #1 (Strong Buy).

Within the past quarter, the Zacks Consensus Estimate for BHP's full-year earnings has moved 2.6% higher. This shows that analyst sentiment has improved and the company's earnings outlook is stronger.

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Based on the most recent data, BHP has returned 11.2% so far this year. Meanwhile, stocks in the Basic Materials group have gained about 4.2% on average. This shows that BHP is outperforming its peers so far this year.

Another Basic Materials stock, which has outperformed the sector so far this year, is Commercial Metals (CMC). The stock has returned 15.7% year-to-date.

The consensus estimate for Commercial Metals' current year EPS has increased 22.1% over the past three months. The stock currently has a Zacks Rank #1 (Strong Buy).

Breaking things down more, BHP is a member of the Mining - Miscellaneous industry, which includes 49 individual companies and currently sits at #70 in the Zacks Industry Rank. On average, this group has gained an average of 11.3% so far this year, meaning that BHP is slightly underperforming its industry in terms of year-to-date returns.

In contrast, Commercial Metals falls under the Steel - Producers industry. Currently, this industry has 22 stocks and is ranked #11. Since the beginning of the year, the industry has moved +14.8%.

Investors with an interest in Basic Materials stocks should continue to track BHP and Commercial Metals. These stocks will be looking to continue their solid performance.

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Zacks Investment Research