Want strong stocks that also have a positive impact on the world? Morgan Stanley has 30 candidates

Wednesday, February 28, 2018

Looking for stocks that don’t just do well, but also do good? This might be a start.

Morgan Stanley analysts put together a list of 30 stocks that in their view “offer a strong fundamental investment case at the same time as creating a positive social or environmental impact.”

According to a Thursday note, the 30 were selected by the investment bank’s sustainability team, which evaluates securities through the lens of ESG investing. ESG stands for environmental, social, and corporate governance; strategies that evaluate companies on these issues and use those scores to form portfolios are sometimes called socially responsible investing.

There are some trends in the group of 30; nearly half is comprised of health care and technology companies, both of which make up 20% of the unofficial portfolio, while 13% of the holdings are in the consumer sector, and financials make up another 13%. In addition, 40% of the names are based in North America, while 37% are European and 3% are Japanese. The remainder are from the Asia-Pacific region.

To create the collection, Morgan Stanley looked solely at stocks with a market capitalization of at least $5 billion and which are rated either “overweight” or “equal weight” by the investment bank’s analysts. From there, it narrowed the pool into companies that derive at least half of their revenue or Ebita (earnings before interest, taxes, and amortization) from products or services “that solve a sustainability challenge and thus create a positive social or environment impact.”

Photo courtesy of Ken Teegardin.

Source: MarketWatch (link opens in a new window)

ESG, impact investing