Once a year in April we pay lip service to the environment. Maybe we’re a little more conscientious with our recycling or we write a check to a green charity. Maybe, we plant a tree. I propose Earth Day as a day to show our thanks to green companies by buying their stock and then watching them grow profits for us. Sometimes being selfless is being selfish.
Some of the greenest companies are the biggest and most surprising names like General Electric Company (NYSE:GE), The Clorox Company (NYSE:CLX), Campbell Soup Company (NYSE:CPB), Intel Corporation (NASDAQ:INTC), Cisco Systems, Inc. (NASDAQ:CSCO), Enbridge Inc (USA) (NYSE:ENB), and Prologis Inc (NYSE:PLD) made the Global 100 Sustainability List released every year at the World Economic Forum at Davos, Switzerland.
Cleaning up with tech
GE has actually filed more clean tech patents than any other public American company with 9,999 from 1981 to 2012. It is outranked five to one by Panasonic, however, with 54,614. GE has a long tradition of innovation and invention beginning with Thomas Alva Edison. On April 10 GE announced that it is partnering up with Quirky, a NYC start up, and providing a patent library of an initial 200 patents for inventor wannabes to use to inspire their own inventions.
General Electric Company (NYSE:GE) is the US’ biggest conglomerate and is a Warren Buffett hold. Its yield is 3.20%. The P/E is high right now for this multinational infrastructure play at 17.98 as it powers closer to its 52-week high.
GE reported Q1 results on Apr. 19. Analysts expected a weak quarter save for the proceeds from the NBC sale but the company beat slightly on EPS by $0.04 for $0.39 EPS and on revenue by $0.3 billion. The stock sold off 4% anyway with its reported weakness in Europe. Going forward, the company’s prospects look brighter consolidating into aviation, oil and gas, medical devices, locomotives, appliances, and wind and gas-fired turbines.
The company bought Lufkin Industries, manufacturers of industrial gears and oilfield equipment, just days ago for $3.1 billion. This should be complementary to its Oil and Gas segment products. When it comes to energy management, alternative energy, cleaner power generation GE is the go-to name.
As ecologically aware as it may be, the AFL-CIO still has a bone to pick with General Electric Company (NYSE:GE) on executive compensation and uses CEO Jeffrey Immelt as their example of the iniquity of worker-CEO pay, claiming it takes roughly 745 workers to equal Immelt’s pay package. If this is an important metric to you as a socially responsible investor, pass on this company.
Cleaning up the world…one home at a time
The Clorox Company (NYSE:CLX) has made a strong commitment to sustainability and shrinking their environmental footprint: moving shipments to rail, reducing the weight of packaging, reducing greenhouse gas emissions and water consumption, and shrinking waste to landfill amounts. It’s even gone so far as to host company “dumpster dive” events to separate recyclables.
The consumer staples names have run big and Clorox hit another 52-week high on Apr. 16 closing at $89.53. It offers a yield of 2.90% at a 58% payout ratio and is a true Dividend Aristocrat, consistently raising dividends for 35 years and buying back shares since 2005. The company turns 100 next month.
The household and industrial cleaning products company has tentatively been moving into personal products with Burt’s Bees, a honey based cosmetics line, plastic wraps, and a limited line of food brands including the popular Hidden valley ranch dressings.
The flu has been good for The Clorox Company (NYSE:CLX) helping ramp up sales by 13% last quarter. Some traders, well aware of the seasonal nature of the flu, buy Clorox in late February and sell in November. This time may be different as the rush for safety and yield has helped Clorox outperform the S&P 500.
Clorox reported strong Q2 2013 results on Feb. 4 with margin expansion, 18% EPS growth year-over-year, and a 9% bump in sales. However, the company has a PEG of 2.54 and an EV/EBITDA of 12.24.
Considering its run of 24.46% over the last 52 weeks and its current P/E of 20.98, Clorox is overvalued if not priced to perfection as Credit Suisse believes. Analysts expect an 8.00% five year EPS growth rate.