At the end of 2012, the company had more than 2,600 alternative energy vehicles. Moreover, it has been at the leading edge of using technology to optimize delivery routes. An example of the results of this effort include saving “almost 100 million minutes of engine-idling time and more than 650,000 gallons of fuel” in a single year. Now that’s starting to sound environmentally friendly.
These initiatives, however, aren’t just nice for the environment. They also help explain the company’s industry-leading operating margin, which United Parcel Service, Inc. (NYSE:UPS) claims is nearly twice that of its closest competitor. While sales dipped during the 2007 to 2009 recession, they are now above their pre-recession high. Earnings have been more volatile, however, because of pension expenses, contractual pay increases, and fuel costs.
That said, the dividend has been headed on a generally higher path for over a decade. After a nice run, though, the shares are, once again, most appropriate for momentum investors.
And Automobiles?
Toyota Motor Corporation (ADR) (NYSE:TM) makes cars and trucks — yet another not-so-environmentally-friendly industry. However, one of the Japanese automaker’s top-selling brands is the Prius line of hybrid cars. The Prius nameplate was the first truly mass-market, environmentally friendly vehicle. That puts the company at the head of the car class for being green.
After a rough patch in which the company’s quality was sorely questioned on top of a deep world-wide recession, Toyota Motor Corporation (ADR) (NYSE:TM) appears to be getting back into the game. While still well below their 2008 peak, revenues are solidifying after hitting a low in the middle of 2011. While earnings dipped between 2011 and 2012, they, too, appear to at least be headed in the right direction again, after the company dipped into the red during the recession.
Like the other two companies here, Toyota Motor Corporation (ADR) (NYSE:TM) shares have had a big run over the last year or so, so they are most appropriate for — you guessed it — green-minded momentum investors. That said, if depressed car demand continues to pick up, there could be plenty of upside here.
Hidden Green
These three picks highlight some of the most environmentally friendly companies providing “necessary evil” products and services. Big price advances, though, make them a bit too pricey for value-minded investors. Toyota Motor Corporation (ADR) (NYSE:TM)’s is most likely to surprise to the upside, however, should car sales continue to climb.
The article Environmental Investing: Part 2 originally appeared on Fool.com.
Reuben Brewer has no position in any stocks mentioned. The Motley Fool recommends United Parcel Service. Reuben is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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