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 Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) 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 pharmacist in a lab coat carefully analyzing a vial of medicine for its quality.
Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN)
Number of Hedge funds holding: 68
Forward P/E as of May 06, 2025: 14.18
Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) is a leading biotechnology company serving people living with eye disease, cardiovascular disease, cancer, and inflammation. Headquartered in New York, the company develops and markets life-changing medicines for people with severe illnesses. Driven by its “Doing Well by Doing Good” philosophy, REGN facilitates a culture that promotes integrity and builds sustainable communities.
The company is quite known for its patient support programs designed to provide education and enhance access through insurance eligibility support, patient resources, financial aid, and the provision of free medicine. Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) also makes donations to external foundations to offer financial assistance to patients who might otherwise face challenges in sourcing those medications.
The core strategy of its ESG approach is STEM Education. Through investments in this area, Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN)’s students are nurtured to continue transformative innovations. The company has invested heavily in infrastructure, with its $4.4 million investment in the Regeneron DNA Learning Center truly standing out. The employees have a special role to play as they spend hours during the global volunteerism initiative, Day for Doing Good, to create STEM kits for nearby schools.
As with any responsible enterprise, Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) is committed to a healthier, greener tomorrow. Enhancing renewable energy usage, conserving natural resources, reducing waste, and protecting biodiversity are some of the many strategies it adopts. The company has an excellent evaluative framework whereby it measures the risks to and impacts on climate change through its enterprise risk management (ERM) program. Moreover, the health powerhouse has set environmental targets to help understand the potential climate-related impacts, particularly those in the supply chain. For instance, more than 50 suppliers now align with the company’s Scope 3 GHG emissions initiatives. With that in mind, REGN is one of the best cheap stocks to buy.
Overall REGN ranks 6th on our list of cheap ESG stocks to buy according to hedge funds. While we acknowledge the potential of REGN 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 REGN 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.