Seven AAA-rated ESG firms: A look at how these stocks faring

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Seven AAA-rated ESG firms: A look at how these stocks faring

 Seven AAA-rated ESG firms: A look at how these stocks faring
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Highlights

  • Microsoft Corporation (NASDAQ: MSFT) stock rose 40% year-to-date. The EPS diluted increased to US$7.97 for FY 2021 compared to US$5.76 in FY 2020.

  • Best Buy Co., Inc. Common Stock (NYSE: BBY) stock gave a 15% return YTD. Its dividend yield is 2.46%.

  • NVIDIA Corporation Common Stock (NASDAQ: NVDA) has a P/E ratio of 78.8. Its stock generated a 69% return year-to-date. 

The stock market is fraught with risks, yet its opportunities and income potentials lure investors. However, some investors also look for top ESG (Environmental, Social, and Corporate Governance) rated companies besides profit. These companies are rated based on their commitment to environmental protection, social justice, and corporate management ethics. 

These firms are measured on a scale of AAA to CCC, in which the former is the highest while the latter implies a lowest rating. The MSCI rating is the most prevalent ESG rating standard, given based on the company’s long-term commitment to socially responsible investments.

Here we discuss seven MSCI AAA-rated ESG companies and their financial positions.

Microsoft Corporation (NASDAQ: MSFT)

MSCI ESG Rating - AAA

Stock performance YTD – 40%

The Washington-based technology company is famous for its windows operating system and MS Office suite. In addition, it develops and licenses consumer and enterprise software. The company has held the rating since June 2018.  

Its market capitalization is US$2.29 trillion, and its P/E is 37.82. The dividend yield is 0.74%, with an annualized dividend of US$2.48 per share. 

For the fiscal year ended June 30, 2021, the net income was US$61.27 billion, a 40% increase over the previous year. The revenue for FY 2021 was US$168 billion, reflecting an 18% increase YoY. The earnings per share increased to US$7.97 for FY 2021 compared to US$5.76 in FY 2020. 

The stock closed at US$304.21 on Oct 15, 2021, with a share volume of 25,384,800. 

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Top rated ESG stocks: Microsoft Corporation (NASDAQ: MSFT), Best Buy Co., Inc. (NYSE: BBY), NVIDIA Corporation (NASDAQ: NVDA), 3M Company (NYSE: MMM), Expeditors International of Washington, Inc. (NASDAQ: EXPD), C.H. Robinson Worldwide, Inc. (NASDAQ: CHRW), and Salesforce.com Inc (NYSE: CRM).

Source – pixabay

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Best Buy Co., Inc. (NYSE: BBY)

MSCI ESG Rating - AAA

Stock performance YTD – 15%

The NYSE-listed consumer electronics retailer holds AAA ratings and leads 87 companies in the retail-consumer discretionary industry. Best Buy has maintained the rating since July 2019.

The Richfield, Minnesota-based BBY’s current market capitalization is US$28.28 billion, and the P/E ratio is 11.73. The annualized dividend is US$2.80, and the dividend yield is 2.46%.

For the July quarter of 2021, the company posted a net income of US$734 million on revenue of US$11.85 billion. In the corresponding quarter of 2020, the net income was US$432 million on revenue of US$9.9 billion.

The stock closed at US$113.64 on Oct 15 with a share volume of 2,133,544.

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NVIDIA Corporation (NASDAQ: NVDA)

MSCI ESG Rating - AAA

Stock performance YTD – 69%

The Santa Clara, California-based NVDA designs graphic processing units (GPUs) for data centers, gaming, and infotainment systems. It maintained the AAA rating since January 2018, leading nearly 75 companies in the semiconductor industry.

The market capitalization of the company is US$552.59 billion, and the P/E ratio is 78.8. The EPS is US$2.80, the dividend yield is 0.07%, and the annualized dividend is US$0.16.

For the quarter ended August 1, 2021, the revenue was US$6.5 billion compared to US$3.9 billion for the same quarter a year ago. The net income was US$2.37 billion compared to US$0.622 billion in the same quarter of 2020. Its EPS diluted increased to US$0.94 from US$0.25 in the corresponding period of 2020. 

The stock closed with a share volume of 22,699,400 at US$218.62 on Oct 15, 2021. 

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3M Company (NYSE: MMM)

MSCI ESG Rating - AAA

Stock performance YTD – 6%

The company manufactures and markets different products and services related to healthcare, safety, industrial, transportation, electronics, and consumers sectors. The rating has been the same since August 2018 in the industrial conglomerate category that groups 33 companies.

The Minnesota-based MMM’s market capitalization is US$104.59 billion with a P/E ratio of 17.77. The current dividend yield is 3.25%, with an annualized dividend of US$5.92 per share. 

The company posted net sales of US$8.95 billion and a net income of US$1.52 billion for the June quarter of 2021. The net sales and net income were US$7.18 billion and US$1.31 billion, respectively, in the same period of the previous year.  

The stock closed at US$181.94 with a share volume of 2,160,823 on Oct 15, 2021.

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Expeditors International of Washington, Inc. (NASDAQ: EXPD)

MSCI ESG Rating - AAA

Stock performance YTD – 29%

The Seattle, Washington-based company is a non-asset-based, third-party logistics provider focused on international freight forwarding. It leads 17 ESG companies in the air freight and logistics segment, as per MSCI, and has held the same rating since 2018.

EXPD’s market capitalization is US$20.19 billion. Its P/E ratio is 20.52, the dividend yield is 1%, and the annualized dividend is US$1.16 per share.

For the June quarter of 2021, its revenue and net income were US$3.6 billion and US$317 million, respectively. The revenue and net income were US$2.41 billion and US$184 million, respectively, in the June quarter of 2020.   

It closed at US$116.06 on Oct 15 with a share volume of 1,246,100.


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Top ESG stocks: Microsoft Corporation (NASDAQ: MSFT), Best Buy Co., Inc. (NYSE: BBY), NVIDIA Corporation (NASDAQ: NVDA), 3M Company (NYSE: MMM), Expeditors International of Washington, Inc. (NASDAQ: EXPD), C.H. Robinson Worldwide, Inc. (NASDAQ: CHRW), and Salesforce.com Inc (NYSE: CRM).

Source - pixabay

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C.H. Robinson Worldwide, Inc. (NASDAQ: CHRW)

MSCI ESG Rating - AAA

Stock performance YTD – 7.5%

It is another transportation service provider with an AAA rating. It made it to the list in July 2021. The company is a non-asset-based third-party logistics provider focused on domestic freight brokerage, primarily truck, and rail. 

The Eden Prairie, Minnesota-based company holds a market capitalization of US$13 billion. Its P/E ratio is 20.71, the forward P/E for one year is 17.33, the dividend yield is 2.16%, and the annualized dividend is US$2.04.

The net income for the June quarter of 2021 was US$193 million compared to US$168 million in the same quarter of 2020. The revenue increased to US$5.53 billion compared to US$3.62 billion in the June quarter of the previous year. 

The stock closed at US$94.63 with a share volume of US$94.63 on Oct 15, 2021.

Salesforce.com Inc (NYSE: CRM)

MSCI ESG Rating - AA

Stock performance YTD – 32%

The San Francisco, California-based Salesforce provides cloud computing solutions as a software-as-a-solution. It leads 151 companies in the software and service industry in ESG and has held the AA rating since November 2020. 

It has a market capitalization of US$286 billion and a P/E ratio of 117.39. The company did not pay dividends, but its stock grew considerably year-to-date.

For the June quarter of 2021, the revenue and net income were US$6.34 billion and US$0.535 billion, respectively. For the June quarter of 2020, it posted revenue of US$5.15 billion and net income of US$2.63 billion. 

The stock closed at US$291.66 with a share volume of 5,119,331 on Oct 15, 2021.

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Bottomline

More and more aware companies are today prioritizing their social, environmental, and corporate governance responsibilities. According to analysts, more than two-thirds of S&P 500 companies focus on corporate social responsibility and publish reports. 

Thus, ESG is a valuable measure to understand corporate values. As such, ESG stocks are gaining the attention of late. However, one should invest only after due consideration of all the risk factors.

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