Socially Responsible Stocks Worth A Look

By Glenn Curtis | February 05, 2009 AAA

Although making money is often the No.1 goal for many investors, it may not be the only goal. Many individuals are also looking to invest in companies that may share their ethical and/or political beliefs and goals. The generally accepted term for this investing niche is socially responsible investing.

What Is A Socially Responsible Investment?
There is no hard-and-fast rule per se. Some individuals hold the bar quite high and will only consider investing in a company if it has an environmental record as pure as the driven snow. Others may prefer companies that focus specifically on renewable energy or on other measures that may help make the world a better place. A socially responsible investor may also avoid so-called sin stocks, which are companies engaged in selling or producing tobacco, alcohol or weapons. (To learn more about investing ethically, be sure to read Go Green With Socially Responsible Investing, or take it to the extreme with our article Extreme Socially Responsible Investing.)

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Social Responsibility, Indexed
According to its website, "The Dow Jones Sustainability Indexes track the financial performance of the leading sustainability-driven companies worldwide." With that in mind, following are five stocks listed on the Dow Jones Sustainability United States Index that have produced returns exceeding the S&P 500 over the last 52 weeks.

Company Market Capitalization 52-Week Change
Coca Cola
$97.7 billion


General Mills
$19.4 billion


Procter & Gamble
$158.4 billion -19.8%
$26.7 billion -23.8%
Walt Disney Co.
$37.4 billion -34.6%
S&P 500 N/A -40.2%
Data as of market close February 2, 2009

Walt Disney Co.
Disney is well-known for its ability to both thrill and entertain. However, many people don't realize that the company also does a great deal to physically help make our world a better place.

According to its 2007 "Enviroport", essentially a report detailing what the company is doing to limit waste and preserve Mother Earth, Disney as a whole has recycled more than 925,000 tons of materials since 1991. That's a tremendous amount of material that might have otherwise ended up in landfills. Moreover, it's focused on purchasing "green" recycled materials such as paper. Its ABC segment has even gone so far as to purchase more than 40,000 square feet of carpeting with a high recycled fiber content.

The company does its share to help animals and species that might not be able to help themselves. According to its website: "In 2007, worldwide conservation efforts received a $1.5 million boost from the Disney Wildlife Conservation Fund (DWCF), bringing the total amount of awards from the fund to more than $11 million since Disney's Animal Kingdom opened in 1998."

Lower Than Expected First-Quarter Results
Disney made headlines earlier in the week thanks to its reporting lower than expected first-quarter results. Clearly that's not good news for shareholders. However, over the long run I am confident in the company's prospects. I also think its caring about environment and wildlife is something to be commended and, in fact, imitated by other companies.

Walgreen Cares About Our Environment
With more than 7,000 locations, the drugstore chain is a formidable player in the industry. However, it's not too big to care about our environment. Its website mentions installing energy savers like solar panels and using flex fuel cars. The site points out that the company designs stores with sustainability in mind. It also reportedly raised about $5 million to fight diabetes, heart disease and cancer in 2008.

In spite of the difficult retail environment, the company reported January sales were up more than 5%. Long-term, I think the company is a winner.

Bottom Line
Socially responsible companies are essentially looking out for all of us. As such, I think investing in them may be worth a look in return.

For further reading on this topic, check out the answers to our frequently asked questions: What is socially responsible investing? and Is there a difference between socially responsible investing (SRI) and green investing?

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