The materials sector includes companies involved with the discovery, development and processing of raw materials. The sector is highly influenced by supply and demand, and can fluctuate based on changes in the housing market, infrastructure development, the auto industry, and other economic factors.

We analyzed over 1,600 stocks in the materials sector looking for those that are BUY rated and pay the highest dividends. Our criteria included A and B rated stocks with at least the industry average dividend of 2.6 percent, and industry beating five year total returns. Our search returned these three companies:

1. Supremex Inc. (SXP.TO) pays a 4.1 percent dividend, rated B-.
2. The Dow Chemical Company (DOW) pays a 3.5 percent dividend, rated B.
3. Sonoco Products Co. (SON) pays a 2.7 percent dividend, rated B.

Although, even with strong dividend payouts, these companies have a lower than 75 percent payout ratio, retaining some of their earning to reinvest and grow the business.

Any of the three stocks can provide dividend income coupled with the investment safety of the BUY rating.