Starbucks Corporation (SBUX), Whole Foods Market, Inc. (WFM), The Home Depot, Inc. (HD): How Culture Can Drive Returns

Home Depot is a green operator

The Home Depot, Inc. (NYSE:HD) is the well regarded leader in the home improvement retail sector. Investors may be surprised to learn that the company also shoots to be green. This is evidenced by the retailer’s Forest Stewardship Council certified-wood program. Home Depot is the first US home improvement retailer to carry FSC-certified wood.

The company is a leader in sustainable-wood sourcing with more than 94% of its wood coming from responsibly managed domestic forests. A small fraction of that-less than 0.15%-comes from South American rainforests.

Business wise, The Home Depot, Inc. (NYSE:HD) has a solid track record of earnings-per-share growth due in large part to consistent revenue growth. In the past year, the share price has risen by about 40%. That said, the retailer’s stock price is hovering at $75 per share which is close to its 52 week high. In the long run, however, a more solid housing recovery will be a boon to The Home Depot, Inc. (NYSE:HD)’s share price.

The bottom line

Obviously, investors want to make money by investing in profitable companies. To paraphrase the late economist Milton Friedman, the business of business is business. So investors need to first consider a company’s financial strength and its ability to make profits.

However, another consideration for many investors is how companies go about making profits; and this comes down to a question of values (not be confused with value investing). In the final analysis, a key factor for consumers and investors is a company’s culture, in addition to its financial strength. Making profits and creating a quality culture often go hand in hand.

The article How Culture Can Drive Returns originally appeared on Fool.com and is written by Kyle Colona.

Kyle Colona has no position in any stocks mentioned. The Motley Fool recommends Home Depot, Starbucks, and Whole Foods Market. The Motley Fool owns shares of Starbucks and Whole Foods Market. 

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