The less cyclical the business, the more consistent the earnings, Cramer said. That means Wall Street is more willing to pay a premium for the stock.
The chemicals sector is enjoying a mini bull market of its own. Granted, it’s not as big as the ragers in agriculture, machinery, oil and oil service, aerospace, infrastructure, and minerals and mining, but the chemicals market is still moving.
BASF does have a finger in the agriculture market, and Cramer expects its grip there to widen.
Oil and gas is even better, though. BASF is the largest oil producer in Germany and operates natural gas pipelines with Gazprom. The oil holdings also help because oil and gas are used in a number of chemical products and it’s easier to sidestep high market prices when you have your own supply.
As for the U.S. economy, only 22% of BASF’s sales and 12% of its earnings before interest and taxes come from North America. That makes the company a true ROWer in Cramer’s book.
So if you’re looking for another great European company to add to your portfolio, Cramer says this is definitely worth a look.
Bottom Line: Cramer likes chemicals, and BASF is a great pick.
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