Stocks for MLK Day
Erick is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Monday is Rev. Martin Luther King, Jr. Day, a day in which we should think of racial unity and follow Reverend Martin Luther King, Jr.’s vision for a better future. Even though MLK was not known as a stock investor, I would imagine he would have had some preference for companies that are good corporate citizens and the promise of some of the biotech companies that may help improve the lives of all of us.
Socially responsible ETFs
Companies can be a force for good and not just for profits. If you are not a stock picker then you can have a mutual fund manager screen the good companies from the bad, and in this case we can pick some socially responsible ETFs: iShares MSCI USA ESG Select Index Fund and iShares MSCI USA ESG Select Index Fund for two examples.
DSI has large-cap shares with an average PE of 14, and has assets of about $165 million with a yield of 1%. KLD has a similar asset size of $175 million, and a PE of 14 with a higher yield of 1.76%.
Companies that treat their employees with respect
Costco (NASDAQ: COST) is very family friendly and pays their employees fair salaries and benefits. The company is a good citizen and is a favorite of socially responsible funds. For a retailer, Costco is a bit overpriced, but it represents best in class retailing. It has a PE of 24 or so and a dividend yield of 1.1%. Even after raising its membership fees, its membership levels have not dropped.
Whole Foods Market (NASDAQ: WFM) is more gentrified and upscale, but they do well by their employees and promote healthy eating habits. Contrast that to a company like McDonald’s, which is not known for its health food. With a PE of 36 and a dividend yield of 0.9%, it is richly valued.
Biotech stocks, a force for good
Vertex Pharmaceuticals has an approved drug out, Incivek for Hepatitis C treatment, but the Gilead combination treatment appears much more promising. Gilead is not cheap at a PE ratio of 24 or so, but with the prevalence of Hepatitis C, if the drug combination is as good as it seems then sales should pick up nicely.
Novo Nordisk (NYSE: NVO) is a pharmaceutical company that makes innovative delivery devices for diabetes mellitus treatment. Diabetes is prevalent in the African American community, and any therapies that can improve the care of this disease can help the African American community. Novo Nordisk has a PE of 27.45 and pays a 1% dividend yield. It's not exactly cheap, but given the promise of its therapies, it is in line with others in the industry.
These are just some investment ideas to think about over MLK day.
xerohype owns shares of Whole Foods. The Motley Fool recommends Costco Wholesale, Gilead Sciences, and Whole Foods Market. The Motley Fool owns shares of Costco Wholesale and Whole Foods Market. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!