We recently compiled a list of the 11 Cheap ESG Stocks to Buy According to Hedge Funds. In this article, we are going to take a look at where Elevance Health, Inc. (NYSE:ELV) stands against the other cheap ESG stocks.
These days, it seems like everyone wants to wear the “saving the world” cape. Whether this urge to make a real impact on the world stems from a desire to ride the social trend wave or simply out of genuine concern is, well, a debate for another day. For now, let’s focus on the fact that all companies must adhere to Corporate Social Responsibility (CSR) by law.
In other words, ESG companies are those that incorporate Environmental, Social, and Governance factors into their operations and decision-making. This framework is utilized to measure an organization’s practices and performance on sustainability and ethical grounds. In capital markets, some investors employ ESG criteria to assess companies and make their investment decisions accordingly, a practice known as ESG investing. While investing delivers financial returns, ESG investing offers both financial returns and societal impacts, and that’s what is most valued by some investors.
Some believe ESG investing is aligned with reduced risk exposure, stakeholder interests, and superior returns. Not only attractive in theory, but there are reports that back this form of investing. For instance, the Sustainability Megatrends Report by Cushman & Wakefield reveals that ESG companies are gaining traction from institutional investors. A survey of 250 institutional investors indicated that around 60% noted higher performance yield from ESG investments, and 78% were willing to pay higher premiums for these funds.
“Institutional investors are showing increased demand for properties with strong ESG-related management and activities,” the report underscores.
A US SIF “Trends Report” reveals that out of the US market size of $52.5 trillion, $6.5 trillion (12%) is identified as a sustainable or ESG investment. Having said that, as many as 73% of respondents believe the sustainable investment market will grow over the next few years. Therefore, community investing continues to shine with rising enthusiasm across several types of investors.
ESG companies are mainly ranked by third-party ranking agencies based on how well they perform across Environmental, Social, and Governance indicators. Using standardized metrics, proprietary models, and disclosures, the companies are then assessed and compared. Among the most notable agencies are MSCI, Sustainalytics (by Morningstar), Refinitiv ESG Scores, and S&P Global ESG Scores. In this analysis, we have used the ratings by Sustainalytics, which covers over 15,000 firms across 42 industries globally. The firm recently disclosed its 2025 list of ESG Top-Rated Companies, identifying Global 50 Top-Rated companies and other regional and industry leaders. Given this, we will take a look at some of the best ESG stocks to consider.
Our Methodology:
We have compiled a list of 11 companies ranked by Sustainalytics (by Morningstar) in its recent ESG Top-Rated Companies report. From the report, we identified companies with a forward P/E less than 15, extracted from FINVIZ. From there, we picked companies with the highest number of hedge fund investors, as per Insider Monkey’s database of Q4 2024. From less preferred to highly preferred, according to hedge funds, the selected stocks are listed in either the global, regional, or industry standings in the report.
At Insider Monkey, we are obsessed with hedge funds. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A medical professional working at a computer, utilizing the company’s digital solutions to improve care quality for consumers.
Elevance Health, Inc. (NYSE:ELV)
Number of Hedge funds holding: 73
Forward P/E as of May 06, 2025: 10.57
Elevance Health, Inc. (NYSE:ELV) is a U.S.-based health insurer that operates through four segments, including Health Benefits, CarelonRx, Carelon Services, and Corporate & Other. Incepted in 2001, the company also provides pharmaceutical services, managed care services, health products, and behavioral health management, among others. The company’s purpose revolves around improving lives and communities.
Through its strategic collaborations, the company has indeed made an impact. Elevance Health, Inc. (NYSE:ELV), along with Impact Fitness Foundation (IFF), has managed to develop a weight room and fitness space at Irvington Preparatory Academy. Kyle Weber, Chief Strategy Officer at Elevance Health, made the following comment:
“Health equity intersects with many circumstances, including where you live. By providing a fitness space, students will have increased access to resources needed to optimize their physical health and impact their mental health.”
Elevance Health, Inc. (NYSE:ELV) has a total ESG Risk Score of 9.3, which is considered totally negligible. While the environmental risk stands at 0.1, the social and governance risk scores are 5.3 and 4.0, respectively.
In a recent development, Elevance Health, Inc. (NYSE:ELV) Foundation disclosed an updated five-year plan to invest $150 million over the course of four years through a multilevel approach, including grantmaking, impact investing, associate community engagement, and community action leadership. The company has set aside $10 million as a loan to address social needs by offering access to inclusive financing for aim-focused businesses that will drive the health ecosystem.
Additionally, a $14.1 million grant to Feeding America’s Food as Medicine program is assisting in combating food insecurity. The wildfires in Southern California affected many, and this isn’t something overlooked by the company. In response, the powerhouse is committed to an initial $10 million in grants to support community resilience. With a focus on the vulnerable parts of society, ELV is among the best cheap stocks to buy.
Overall ELV ranks 4th on our list of cheap ESG stocks to buy according to hedge funds. While we acknowledge the potential of ELV as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than ELV but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.