In recent years, the environmental, social, and governance (ESG) investing space has grown exponentially. It's gotten so popular that there are now dozens of ESG indexing providers, and the average investor is now asking questions like, "What exactly is ESG investing?" and "Is this the right time to invest in ESG stocks?" If you're a savvy investor looking to add more diverse holdings to your portfolio, you should consider ESG investing as one of many options. According to The Impact Investor, the following are the Top 10 ESG Stocks to Consider for Your Portfolio.
10. Tiffany & Co. (TIF)
One of the most popular luxury jewelry brands globally, Tiffany & Co. is also one of the more sustainable options for your portfolio. The company has a strong commitment to environmental sustainability and ensures that it stays true to its vision by using recycled materials whenever possible and supporting eco-friendly practices. From the start, Tiffany's been committed to reducing its environmental footprint and expects to reduce carbon emissions by 50 percent by 2020.
9. Adidas AG (ADD)
As of May 10, 2018, Adidas AG is the world's second-largest sportswear company by revenue. The company has a strong reputation in the U.S., where it has been the number one tennis shoe brand for four consecutive years and is also currently the number one golf shoe brand in the U.S. Additionally, Adidas AG is also expanding its footprint into all forms of athletic apparel and footwear. It also owns Reebok, which is considered to be one of the top fitness brands on the global stage. Adidas AG's most recent milestones include:
- Reaching 1 billion pairs sold in 2017.
- Opening five production facilities in China to increase production capacity.
- Investing $500 million in a new Boston headquarters with cutting-edge design features, which will open in 2020.
8. American Eagle Outfitters, Inc. (AEO)
One of the best ESG stocks to consider would be American Eagle Outfitters, Inc. (AEO). It operates in two segments: retail and licensing. The retail segment includes the design, manufacture, sourcing, and distribution of apparel, footwear, and accessories under the American Eagle Outfitters brand name. This segment generates revenue through the sale of these product lines to wholesale customers as well as through direct-to-consumer channels. The licensing segment consists of marketing agreements with unaffiliated third parties to use the American Eagle Outfitters brand name on various merchandise items such as apparel, footwear, and accessories for women, men, and children. This company's current valuation is $2 billion, which is still low for a company of this size. For investors looking for a solid ESG stock that isn't too expensive per share yet still offers growth potential, AEO should be high up on your list.
7. Prologis Inc (PLD)
Prologis, Inc. (PLD) is one of the largest providers of industrial real estate in the world. As of December 31, 2017, Prologis owned interests in 2,569 properties spanning 53 countries and territories. The company targets both high-quality warehouses as well as Class A office space. Among the many benefits of investing in Prologis is its low leverage ratio of 0.64x and dividend yield of 4%.
6. Gilead Sciences, Inc. (GILD)
Gilead Sciences, Inc. is a biopharmaceutical company that engages in the worldwide research, development, and commercialization of human therapeutics. The company's products include Harvoni, Truvada, Atripla, Viread, Stribild, Complera/Eviplera, Emtriva/Emtricitabine/Tenofovir Disoproxil Fumarate (FTC), Genvoya/Elvitegravir/Cobicistat (EVG)/Emtricitabine/Tenofovir Alafenamide (FTCA) once-daily regimen for treatment of HIV-1 infection in adults and children; Vemlidy® for treatment of chronic hepatitis B virus (HBV) infection; Epclusa for the treatment of genotype 3 chronic hepatitis C virus (HCV) infection; Odefsey for the treatment of chronic HBV infection in adults with evidence of active disease or who are co-infected with HIV; Quillivant XR for the treatment of ADHD in children aged 6 to 12 years old; Sprycel® as a single agent and in combination with other therapies as initial therapy for patients with newly diagnosed Philadelphia chromosome-positive acute myeloid leukemia (Ph+ AML); Zydelig® as monotherapy or in combination with other therapies as initial therapy for patients with relapsed or refractory multiple myeloma.
5. Nu Skin Enterprises, Inc. (NUE)
Nu Skin Enterprises, Inc. (NUE) is a global anti-aging and wellness company that manufactures and distributes beauty, wellness, and related products. NUE offers a diverse range of product lines, including personal care such as skincare, haircare, weight management, and nutritional supplements; healthy living; home products; wealth creation. The company also operates in approximately 130 markets worldwide.
4. The Mosaic Company (MOS)
The Mosaic Company (MOS) The Mosaic Company is a leading global supplier of concentrated phosphate and potash crop nutrients, with a comprehensive portfolio of products for both agricultural and non-agricultural customers. Mosaic's fertilizer ingredients are key components to our customer's success, as they provide essential nutrients important for plant growth and yield improvement. Founded in 1906 with headquarters in Plymouth, Minnesota, the company's products serve customers primarily in North America and Europe. Mosaic has an A+ credit rating from Standard & Poor's (S&P), an A1 industry credit rating from Moody's Investors Service (Moody), and a BBB+ rating from Fitch Ratings (Fitch). It has been named one of the World's Most Ethical Companies by the Ethisphere Institute every year since 2012.
3. Walgreens Boots Alliance Inc. (WBA)
Walgreens Boots Alliance Inc. (NYSE: WBA ) is the largest retail pharmacy in the United States and the second-largest pharmacy chain globally, with 8,175 locations in all 50 states, Puerto Rico, and Guam. In addition to being a leading pharmacy chain and wholesaler in the United States, Walgreens also operates as a pharmacy benefits manager.
2. Nike Inc.
Nike Inc. is one of the most popular and trusted brands globally. The company has a long history of ethical and sustainable practices, making it a perfect candidate for ESG investing. Nike is also known for its creative advertising campaigns, utilizing celebrities like Michelle Obama or Colin Kaepernick to appeal to their customer base. However, Nike's controversial 2018 ad with Colin Kaepernick led to criticism from Trump supporters and other consumers who took issue with the company's marketing strategy. Nike's share prices sunk more than 3% after Trump tweeted his disapproval of the campaign.
1. Twitter Inc.
Twitter Inc. (TWTR) is a social networking service that facilitates the exchange of short messages called tweets. Tweets are posted publicly and are accessible for everyone to read. Twitter is one of the best stocks to invest in because it has a high-quality management team, low risk of financial loss, and isn't overvalued. Despite recent hiccups with user engagement, Twitter still has well over 300 million active users on the platform. TWTR also boasts an impressive track record with earnings and revenue growth; they have had three consecutive years of increased revenue and earnings per share (EPS). They also have low debt levels and strong cash flow rates. This stock is most suited for investors looking for exposure to the internet industry or who want exposure to TWTR's strong management team led by CEO Dick Costolo. To be a successful investor in the long term, you need to build a diversified portfolio. This can include stocks from various sectors, such as the energy, health care, food and beverage, and retail sectors. The companies on this list are just a few examples of how you can diversify your portfolio with ESG stocks that are both strong financially and considerate of the environment. Investing in ESGs is an excellent way to reduce your carbon footprint and still grow your investment.
Written by Allen Lee
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