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3 ESG Stocks in Focus for the Socially Responsible Investor
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Astute investors largely concentrate on the earnings and balance sheets of a company before investing in them. However, their focus is now changing toward more sensitive issues like carbon emissions, deforestation and overall climate change.
They are willing to associate with firms that are more eco-friendly and adhere to transparent governance, better known as environmental, social, governance (ESG) stocks. After all, companies with high profit margins but low ESG scores are at the moment losing eminence.
Thus, investors should keep a tab on Pool Corporation (POOL - Free Report) , Salesforce, Inc. (CRM - Free Report) and Microsoft Corp (MSFT - Free Report) , which deeply care about sustainability initiatives.
What Are ESG Stocks?
Several companies have now become mindful of the environment, social bias, and governance issues. At the same time, they have sharpened their focus on acting justly when it comes to employees’ needs and minimalizing the impact on biodiversity.
These companies are transparent about their leadership, enforce business ethics, and cater to shareholders’ concerns. Most importantly, their goal is to improve the bottom line but with the least impact on the environment.
Should You Have ESG Stocks in Your Portfolio?
Investors, nowadays, want to do good with their money. They are willing to curtail their investment in companies that do immoral business, including vice stocks and companies that harm the environment. Thus, ESG stocks give them the option to place their bets in a business that is related to their ethical principles.
Climate-related qualms, in recent times, have grown exponentially, which have further led to an increase in demand for companies involved in sustainable, or green business. Moreover, being engaged in sustainable business, ESG stocks are well-poised to gain traction soon when green energy becomes indispensable.
ESG stocks, by the way, help reduce portfolio risk. For instance, PG&E (PCG - Free Report) had to declare bankruptcy in 2019 after wildfires lead to climate changes in California. If they had taken steps to curb carbon emissions, they wouldn’t have faced such a negative outcome.
Similarly, Tyson Foods (TSN - Free Report) was sued in 2020 when workers died after contracting the coronavirus. Several workers were compelled to work despite having COVID-19 symptoms. Needless to say, such an incident impacted the company’s profitability. Had they taken steps to improve the workplace policies, their profit margin wouldn’t have taken a beating.
Also, companies that focus on ESG tend to have strong leadership, which leads to better decision-making. This, in turn, helps the company stay afloat amid market upheavals.
Do ESG Stocks Tend to Outperform?
At present, there is no clarity on whether ESG stocks outdo the border market. ESG investing is comparatively a new concept, so there is little evidence historically that these stocks have better returns compared to other companies.
However, as consumers are becoming socially conscious, ESG stocks no doubt have an edge. Their focus on top-line growth, cost reductions, product upliftment, asset optimization and easing regulatory pressure should certainly drive its shares northward time and again.
3 ESG Stocks to Keep an Eye On
Given the aforesaid benefits, investors should have a look at Pool Corporation. This company is one of the biggest distributors of swimming pool equipment. Pool Corporation aims at waste reduction and provides effective energy solutions to lessen its environmental footprint.
Pool Corporation not only donates through the National Forest Foundation but also participates in the EPA’s Water Sense program. POOL provides customers ample guidance to handle wastewater sensibly.
The Zacks Consensus Estimate for POOL’s current-year earnings has moved up 0.1% over the past 60 days. The company’s expected earnings growth rate for the next year is 5.9%. Its shares have already gained 32.7% over the past five-year period. Pool Corporation has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Another company that should be on investors’ radar is Salesforce. The company is one of the primary providers of CRM software that helps manage cumbersome operations.
Salesforce achieved 100% renewable energy from its operations. The company aims at purchasing renewable energy to increase access to clean power, especially in emerging economies. It also aims at net-zero carbon emissions and has established equal pay initiatives.
The Zacks Consensus Estimate for CRM’s current-year earnings has moved up 4.6% over the past 60 days. The company’s expected earnings growth rate for the current year is 42%. Its shares have already gained 28.1% over the past five-year period. Salesforce sports a Zacks Rank #1.
Lastly, Microsoft has become a solid ESG stock. This tech behemoth and one of the leaders in cloud computing is also known as a leader in energy conservation. Microsoft, along with Volt Energy, is aiming at achieving 100% renewable energy by 2025. And by 2050, the company aims at getting rid of all carbon emissions.
The Zacks Consensus Estimate for MSFT’s current-year earnings has moved up 0.3% over the past 60 days. The company’s expected earnings growth rate for the current year is 4.7%. MSFT shares have already gained 22.3% over the past five-year period. Microsoft currently carries a Zacks Rank #3 (Hold).
Shares of Pool Corporation, Salesforce and Microsoft, by the way, have gained 22.8%, 61.3%, and 41%, respectively, so far this year.
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3 ESG Stocks in Focus for the Socially Responsible Investor
Astute investors largely concentrate on the earnings and balance sheets of a company before investing in them. However, their focus is now changing toward more sensitive issues like carbon emissions, deforestation and overall climate change.
They are willing to associate with firms that are more eco-friendly and adhere to transparent governance, better known as environmental, social, governance (ESG) stocks. After all, companies with high profit margins but low ESG scores are at the moment losing eminence.
Thus, investors should keep a tab on Pool Corporation (POOL - Free Report) , Salesforce, Inc. (CRM - Free Report) and Microsoft Corp (MSFT - Free Report) , which deeply care about sustainability initiatives.
What Are ESG Stocks?
Several companies have now become mindful of the environment, social bias, and governance issues. At the same time, they have sharpened their focus on acting justly when it comes to employees’ needs and minimalizing the impact on biodiversity.
These companies are transparent about their leadership, enforce business ethics, and cater to shareholders’ concerns. Most importantly, their goal is to improve the bottom line but with the least impact on the environment.
Should You Have ESG Stocks in Your Portfolio?
Investors, nowadays, want to do good with their money. They are willing to curtail their investment in companies that do immoral business, including vice stocks and companies that harm the environment. Thus, ESG stocks give them the option to place their bets in a business that is related to their ethical principles.
Climate-related qualms, in recent times, have grown exponentially, which have further led to an increase in demand for companies involved in sustainable, or green business. Moreover, being engaged in sustainable business, ESG stocks are well-poised to gain traction soon when green energy becomes indispensable.
ESG stocks, by the way, help reduce portfolio risk. For instance, PG&E (PCG - Free Report) had to declare bankruptcy in 2019 after wildfires lead to climate changes in California. If they had taken steps to curb carbon emissions, they wouldn’t have faced such a negative outcome.
Similarly, Tyson Foods (TSN - Free Report) was sued in 2020 when workers died after contracting the coronavirus. Several workers were compelled to work despite having COVID-19 symptoms. Needless to say, such an incident impacted the company’s profitability. Had they taken steps to improve the workplace policies, their profit margin wouldn’t have taken a beating.
Also, companies that focus on ESG tend to have strong leadership, which leads to better decision-making. This, in turn, helps the company stay afloat amid market upheavals.
Do ESG Stocks Tend to Outperform?
At present, there is no clarity on whether ESG stocks outdo the border market. ESG investing is comparatively a new concept, so there is little evidence historically that these stocks have better returns compared to other companies.
However, as consumers are becoming socially conscious, ESG stocks no doubt have an edge. Their focus on top-line growth, cost reductions, product upliftment, asset optimization and easing regulatory pressure should certainly drive its shares northward time and again.
3 ESG Stocks to Keep an Eye On
Given the aforesaid benefits, investors should have a look at Pool Corporation. This company is one of the biggest distributors of swimming pool equipment. Pool Corporation aims at waste reduction and provides effective energy solutions to lessen its environmental footprint.
Pool Corporation not only donates through the National Forest Foundation but also participates in the EPA’s Water Sense program. POOL provides customers ample guidance to handle wastewater sensibly.
The Zacks Consensus Estimate for POOL’s current-year earnings has moved up 0.1% over the past 60 days. The company’s expected earnings growth rate for the next year is 5.9%. Its shares have already gained 32.7% over the past five-year period. Pool Corporation has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Another company that should be on investors’ radar is Salesforce. The company is one of the primary providers of CRM software that helps manage cumbersome operations.
Salesforce achieved 100% renewable energy from its operations. The company aims at purchasing renewable energy to increase access to clean power, especially in emerging economies. It also aims at net-zero carbon emissions and has established equal pay initiatives.
The Zacks Consensus Estimate for CRM’s current-year earnings has moved up 4.6% over the past 60 days. The company’s expected earnings growth rate for the current year is 42%. Its shares have already gained 28.1% over the past five-year period. Salesforce sports a Zacks Rank #1.
Lastly, Microsoft has become a solid ESG stock. This tech behemoth and one of the leaders in cloud computing is also known as a leader in energy conservation. Microsoft, along with Volt Energy, is aiming at achieving 100% renewable energy by 2025. And by 2050, the company aims at getting rid of all carbon emissions.
The Zacks Consensus Estimate for MSFT’s current-year earnings has moved up 0.3% over the past 60 days. The company’s expected earnings growth rate for the current year is 4.7%. MSFT shares have already gained 22.3% over the past five-year period. Microsoft currently carries a Zacks Rank #3 (Hold).
Shares of Pool Corporation, Salesforce and Microsoft, by the way, have gained 22.8%, 61.3%, and 41%, respectively, so far this year.
Image Source: Zacks Investment Research