In this piece we’ll take a look at the top five best ESG stocks to invest in. For more stocks, the methodology and risk/reward of this list, head on to 10 Best ESG Stocks to Invest In.
5. Visa Inc. (NYSE:V)
Number of Hedge Fund Holders: 166
% of Vanguard ESG U.S. Stock ETF Holdings: 1.03%
Visa Inc. (NYSE:V) is the largest payment processor in the world. In fiscal 2021, the company processed more than $10 trillion in purchasing transactions. Visa is present in over 200 countries and accepts payments in over 160 currencies. Its systems can handle approximately 65,000 transactions per second.
Visa Inc. (NYSE:V) reported Q3-2022 revenue of $7.3 billion, up 19% year-over-year and non-GAAP EPS was $1.98, up 33%. The management continues to see positive trends in terms of additional spending and transaction lift in the U.S.
Here is what Polen Global Growth Fund had to say about Visa Inc. (NYSE: V) in its Q1 2022 investor letter:
“We added to both Visa and Mastercard during the final quarter of 2021, based on the belief that both businesses were trading at attractive prices and poised to deliver double-digit returns over the next three to five years. Cross-border transactions–a highly profitable business segment for both companies–represent roughly 10% of Visa and Mastercard’s volumes and 25% of their gross revenues, so lockdowns have severely impacted this segment due to stifled travel… We think these near-term headwinds have created an attractive long-term investment opportunity.”
This stock was held by 166 hedge fund holders in our database at the end Q2-2022 and is therefore included in our list of 10 Best ESG Stocks to Invest In.
4. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Holders: 184
% of Vanguard ESG U.S. Stock ETF Holdings: 1.17%
With over 2.5 billion monthly active users, Meta Platforms, Inc. (NASDAQ:META) is the world’s largest online social network. Users interact in many ways, trading messages and sharing news events, images, and videos.
Meta Platforms, Inc. (NASDAQ:META) reported Q2-2022 revenue of $28.8 billion, down 1% year-over. Foreign exchange trends had a significant impact in Q2, in particular, the depreciation of the euro relative to the dollar.
Here is what Alger Capital specifically said about Meta Platforms, Inc. (NASDAQ:META) in their recent investor letter:
“Meta’s share performance responded favourably, however, to first quarter results that, while not strong fundamentally, were positive against extremely low expectations among some investors… In a market environment that is rewarding companies with relatively high current earnings, we believe Meta’s spending discipline resonated with investors.”
This stock was held by 184 hedge fund holders in our database at the end Q2-2022 and is therefore included in our list of 10 Best ESG Stocks to Invest In.
3. Alphabet Inc. Class A (NASDAQ:GOOGL)
Number of Hedge Fund Holders: 191
% of Vanguard ESG U.S. Stock ETF Holdings: 1.88%
Alphabet Inc. Class A (NASDAQ: GOOGL) is among the largest technology companies in the world, primarily known for its search engine, Google.
Here is what GoodHaven Capital Management specifically said about Alphabet Inc. (NASDAQ:GOOG) in its Q2 2022 investor letter:
“We’ve owned Alphabet for many years and for almost all of that time have been expecting growth to moderate. We’ve been happily proven wrong so far, but that expectation remains. As many companies in the tech/venture capital world retrench and possibly reduce their spending on digital advertising, we would not be surprised to see this negatively impact Alphabet’s growth.”
This stock was held by 191 hedge fund holders in our database at the end Q2-2022. Like Visa Inc. (NYSE: V), Meta Platforms, Inc. (NASDAQ: META), Alphabet Inc. Class A (NASDAQ: GOOGL) is in our list of 10 Best ESG Stocks to Invest In.
2. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 252
% of Vanguard ESG U.S. Stock ETF Holdings: 3.60%
Amazon.com, Inc. (NASDAQ:AMZN) is a leading online retailer and one of the highest-grossing e-commerce aggregators, with $386 billion in net sales and approximately $578 billion in estimated physical/digital online gross merchandise volume in 2021.
Amazon.com, Inc. (NASDAQ:AMZN) reported Q2-2022 revenue of $121.2 billion, up 10% year-over. The management stated that many factors, including uncertainty regarding the impacts of the COVID-19 pandemic, fluctuations in foreign exchange rates, changes in global economic conditions and customer demand and spending, and inflation continue to impact the performance of the company.
Alger Capital mentioned the company in its Q2 2022 investor letter, outlining that:
“Amazon.com, Inc. (NASDAQ:AMZN) detracted from portfolio performance in part due to poor operating profit and concerns about future margins. The company disclosed that its first-quarter retail revenues increased 3% relative to Q1 2021 due to increased online shopping last year during the COVID-19 pandemic restrictions fueled by direct-to-consumer fiscal stimulus payments. This growth met an estimate from a consensus of analysts at financial services firms, according to FactSet. For the first quarter, however, amazon.com reported $3.7 billion in operating profit versus $5.3 billion anticipated by a consensus estimate. This substantial miss was driven by increased fuel and international shipping expenses, increased staffing due to hiring for employees who were sick with covid-19 and fulfilment centre capacity buildout that is now becoming better utilized. These factors resulted in shares of amazon.com underperforming during the second quarter.”
This stock was held by 252 hedge fund holders in our database at the end Q2-2022 and is therefore included in our list of 10 Best ESG Stocks to Invest In.
1. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 258
% of Vanguard ESG U.S. Stock ETF Holdings: 6.08%
Microsoft Corporation (NASDAQ:MSFT) develops and sells consumer and corporate software. It is well-known for its Microsoft Windows operating systems and Office productivity suite. The company ranks 1st on our list of 10 Best ESG Stocks to Invest In.
Microsoft Corporation (NASDAQ:MSFT) reported Q4-2022 revenue of $51.9 billion, up 12.4% year-over. The company reported a normalized EPS of $2.23, missing the market consensus by $0.06. The company’s cloud business has grown significantly, reaching $25 billion in quarterly sales for the first time, up 28% and 33% in constant currency.
This stock was held by 258 hedge fund holders in our database at the end Q2-2022 and is, therefore, ranks 1st on our list of 10 Best ESG Stocks to Invest In.
Disclosure: None. You can also take a look at 10 Electric Car Stocks to Buy for 2022 and 10 Best Data Center Stocks To Invest In.
