Johnson Matthey Stock And 2 European Critical Materials Plays Worth A Closer Look

The EU’s rare earths supply scare with China is putting a spotlight on European producers and recyclers that could become more important to key supply chains if export controls bite after October. For investors, this is less about guessing the next headline and more about understanding which businesses might stand to benefit from efforts to secure critical minerals closer to home. This article looks at 3 stocks from our European Rare Earths and Critical Minerals Producers screener that appear positively exposed to the latest news and breaks down what to watch before deciding whether they deserve a place on your watchlist.

AMG Critical Materials (ENXTAM:AMG)

Overview: AMG Critical Materials is a Netherlands based producer and recycler of lithium, vanadium and other specialty metals, supplying battery, aerospace and industrial customers through mining in Brazil, chemical refining in Europe, and advanced furnace and energy storage technologies worldwide.

Market Cap: €1.13b

For investors watching the EU’s scramble to reduce its reliance on Chinese rare earths, AMG Critical Materials offers a direct way to get exposure to Western efforts to secure critical metals at home. The company combines lithium mining and refining, vanadium recycling and high purity metal processing with equipment engineering that is already embedded in downstream rare earth applications, which is attracting interest from governments and large institutions. At the same time, AMG remains unprofitable, carries higher risk funding and has seen its share price lag the Dutch market, so the investment case depends on whether the lithium expansion, recycling projects and new U.S. chrome facility can translate into steadier earnings and a potential re rating over time.

AMG Critical Materials sits at the crossroads of EU resource security and higher risk funding, so the real question is whether the upside story stacks up against the fine print in the 3 key rewards and 2 important warning signs (1 is major!)

NV Bekaert (ENXTBR:BEKB)

Overview: NV Bekaert is a Belgium based industrial group that turns steel wire into high performance products, from tire reinforcement and steel ropes to concrete fibers and specialty materials used across construction, energy, mining, automotive and other sectors.

Operations: Bekaert generates most of its €3.8b in segment revenue from Rubber Reinforcement at about €1.7b, followed by Steel Wire Solutions at around €1.0b, Specialty Businesses at roughly €0.6b and the Bridon Bekaert Ropes Group at about €0.5b, with additional intersegment activity.

Market Cap: €2.0b

NV Bekaert stands out in the EU rare earths and critical materials story because its advanced steel wire and materials technologies are already plugged into battery, renewable energy and infrastructure supply chains that the EU is keen to strengthen. The company is working on circular solutions and recycling, while also returning capital through ongoing share buybacks and a recently increased dividend. This combination may appeal to investors looking for both income and the possibility of capital growth. At the same time, earnings have come under pressure, profit margins are thin and governance quality is mixed. As a result, this is not a straightforward quality-at-any-price story. The key question is whether the growth, capital returns and balance sheet justify taking on those execution and industry risks.

NV Bekaert’s mix of thin margins, higher capital returns and a €2.0b market cap suggests there is more going on beneath the surface. The full picture only really comes together in the 2 key rewards and 3 important warning signs

Johnson Matthey (LSE:JMAT)

Overview: Johnson Matthey is a UK based chemicals and advanced materials company that focuses on clean air catalysts, platinum group metal refining and recycling, and components for hydrogen fuel cells and electrolysers used in cars, trucks, industrial equipment and energy systems worldwide.

Operations: Johnson Matthey generates most of its £12.6b in revenue from PGM Services at about £10.3b, followed by Clean Air at roughly £3.8b and Hydrogen Technologies at about £80m, with eliminations of around £1.6b.

Market Cap: £3.3b

Johnson Matthey sits right in the EU’s search for more secure critical materials, combining a large PGM recycling and refining business with clean air catalysts and early stage hydrogen components, all backed by a sizeable presence in the UK, US, Europe and Asia. Some investors may see forecast earnings growth together with a low P/S ratio versus the wider chemicals sector as a potential value story. However, the company is currently loss making, carries high debt and its dividend is not well covered by earnings, so any investment case depends more on a turn in margins than on steady cash flows today. The key consideration is whether that mix of circular economy exposure, hydrogen optionality and balance sheet risk results in a risk reward profile that aligns with your portfolio objectives.

Johnson Matthey’s mix of PGM recycling, clean air catalysts and early stage hydrogen is easy to overlook, but the real tension sits in how that story lines up with the 2 key rewards and 2 important warning signs

The three stocks covered here are just the starting point. The full Simply Wall St European Rare Earths and Critical Minerals Producers screener has surfaced 28 more companies with equally compelling narratives that could matter to EU supply chains, and you can access them all through the European Rare Earths and Critical Minerals Producers screener. Use Simply Wall St to identify and analyze the specific catalysts, balance sheet profiles and business narratives that matter to you so you can focus on the highest conviction ideas within this theme.

Take Control of Your Investment Journey

If NV Bekaert or any of these companies sound like a great opportunity, register for FREE with Simply Wall St and add your companies to a Watchlist to monitor the share price against the fair value the ideal entry point. Once you've made your move, manage your holdings with our Portfolio Command Center that filters out the noise to deliver only the most critical, actionable updates. Throughout your journey, our Community allows you to filter the best ideas from thousands of investor perspectives. By uncovering hidden catalysts and risks early, you'll accelerate your decision-making and stay one step ahead of the market.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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