ESG stock and fund picks for July include blue-chip names, alternative and renewable energy companies, yieldcos, a money market fund, and more. Top analysts from InvestorPlace, The Motley Fool, Forbes, and wallst.com, offer their recommendations. With stock market optimism near new highs, ESG and sustainable investing analysts are increasingly focused on finding tomorrow’s winners today

PODCAST: ESG Stock and Fund Picks for July

Transcript & Links, Episode 36, July 17, 2020

Hello, Ron Robins here. Welcome to podcast episode 36 published on July 17 titled “ESG Stock and Fund Picks for July”— and presented by Investing for the Soul. investingforthesoul.com is your site for vital global ethical and sustainable investing news, commentary, information, and resources.

Remember that you can find a full transcript, links to content – including stock symbols and bonus material – at this episode’s podcast page located at investingforthesoul.com/podcasts.

And Google any terms that are unfamiliar to you.

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1. ESG Stock and Fund Picks for July

The first article is by David Moadel on InvestorPlace. It’s titled 5 ESG Stocks to Buy for Conscientious Investment Gains. I’ll first mention a company he recommends then follow with some relevant quotes from him.

1) Cola-Cola (KO). Since 1984, The Coca-Cola Foundation has awarded over $1 billion in grants to support sustainable-community endeavors worldwide…. Each year, the company strives to give back 1% of the previous year’s operating income… it sports a tasty forward annual dividend yield of 3.65% as well as a very reasonable trailing 12-month price-to-earnings ratio of 18.78.

2) Salesforce (CRM). Long-term stakeholders of customer relationship management (CRM) platform Salesforce have done well financially… Salesforce wants to achieve 100% renewable energy use by the year 2022. (It’s stock] trajectory is clearly to the upside.

3) 3M (MMM). 3M sends its best and brightest to cities in various global localities to work alongside organizations, nonprofits and local municipalities… Currently, 3M delivers a forward annual dividend yield of 3.8%. Plus, the stock features a trailing 12-month price-to-earnings ratio of 17.9. These metrics highlight a strong profile that any ESG investor can feel good about.

4) NextEra Energy (NEE). [Is] currently the world’s biggest solar and wind energy producer… ‘NextEra has reduced its carbon dioxide emissions rate by 52 percent since 2001 and is targeting a reduction of more than 65 percent by 2021, relative to a 2001 baseline,’ according to analysts at RBC Capital… NextEra Energy stock should keep investors satisfied with a forward annual dividend yield of 2.34%.

5) McDonald’s (MCD). McDonald’s has a goal of procuring 100% of the company’s ‘guest’ (i.e., customer) packaging from recycled, renewable or certified sources… Turning our attention to McDonald’s stock, we can observe that it offers a tasty forward annual dividend yield of 2.74%.” End quotes.

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2. ESG Stock and Fund Picks for July

A new analyst to this podcast is Paul Ausick who has penned an article titled 7 Alternative Energy Stocks With Massive Market Growth in the Coming Years. He writes about some familiar companies to the listeners of this podcast. His article was found on the walllst.com site.

Here are some quotes and recommendations from him.

Alternative Energy Producers

“1) Plug Power Inc. (NASDAQ: PLUG) [Plug Power] offers hydrogen fuel cell solutions for electric vehicles and electricity markets in North America and Europe. The company announced two acquisitions… and the stock price shot up 20% following the announcement… The consensus price target is $9.34 and the high target is $14.00 from H.C. Wainwright. At the high target price, the stock has an implied upside of 71.2%.

2) Bloom Energy Corp. (NYSE: BE) designs, manufactures and sells solid-oxide fuel cells for on-site power generation… the consensus price target is $11.00. At the high price target of $21.00, the implied upside on the stock is 67.6%.

3) First Solar Inc. (NYSE: FSLR) designs and manufactures its own modules, and the company’s systems segment designs and builds solar energy systems… The consensus 12-month price target on the stock is $53.57, with the high target set at $75.00 per share. At that price, the implied upside to Wednesday’s closing price is 29.2%.

4) Brookfield Renewable Partners L.P. (NYSE: BEP) is a Bermuda-based yieldco that owns and operates some 19 GW of renewable generating in all parts of the world… the consensus price target is $35.63… Brookfield is significantly overvalued, but the firm’s dividend yield is 4.4% and the implied upside to the high target is 28.3%.

5) Sunrun Inc. (NASDAQ: RUN) designs, develops, installs, owns and maintains residential solar energy systems in the United States. The company recently acquired rival Vivint Solar Inc. (NYSE: VSLR) for $3.2 billion in stock… The consensus price target is $24.43, and the high target was set Monday at $31.00. At that high target price, the implied upside is 9.7%.” End quotes.

Yieldcos

6) NextEra Energy Partners L.P. (NYSE: NEP) is a yieldco that buys, owns and manages contracted clean energy projects and natural gas pipelines in the United States… At the high price target of $65.00, the implied upside on the stock is 18.3%. NextEra Energy Partners pays a dividend yield of 4.17%.

7) Atlantica Sustainable Infrastructure PLC (NASDAQ: AY) is a U.K.-based yieldco that owns and manages renewable energy and other assets (including natural gas) in several countries in the Western Hemisphere and in Spain, Algeria and South Africa… The high price target of $34.00 implies an upside of 13.9%. The company also pays a dividend yield of 5.57%.

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3. ESG Stock and Fund Picks for July

Travis Hoium has again written about his favourite renewable energy stocks that mirror some of the comments made by the previous analysts. Mr. Hoium’s article is titled 3 Top Renewable Energy Stocks to Buy in July and as usual, appeared on the Motley Fool site.

Once more, I’ll mention the companies followed by his relevant quotes.

“1) NextEra Energy Partners (NYSE: NEP). [Yes this is obviously a favourite of these analysts! Now getting back to the quote…] NextEra Energy Partners owns and operates wind- and solar-power generating assets, paying up front for the projects and then collecting revenue over the course of decades as they produce electricity… Management says that it expects to boost the dividend by 12% to 15% annually through 2024, so even with the payout yielding 4.1% today, this dividend stock has a lot of upside ahead. 

2) SunPower (NASDAQ: SPWR). SunPower is about to spin off its high-efficiency solar manufacturing business as Maxeon Solar Technologies… The new SunPower will still use Maxeon solar panels… Today with the SunPower Design Studio, you can have a solar installation designed for your house and get a price quote online in a matter of minutes… Over the next few years it may even become the biggest residential solar company in the U.S., a title it already holds in commercial solar. 

3) Canadian Solar (NASDAQ: CSIQ). The solar industry is booming worldwide, and Canadian Solar is one of the industry’s biggest manufacturers and project developers… Canadian Solar is one of the few manufacturers that is still building and selling large solar projects, and with a backlog and pipeline of 15.7 gigawatts of new projects, this business could generate billions of dollars of future revenue.” End quotes.

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4. ESG Stock and Fund Picks for July

Forbes MoneyShow posted an article by Jim Woods titled 3 Socially Responsible ETFs For Impact Investing. These ETFs have been covered here several times before but it’s always interesting to see analysts providing their unique perspectives.

As usual, I’ll mention each one followed by quotes from Mr. Woods.

“1) The iShares ESG MSCI U.S.A. ETF (ESGU) tracks an index composed of U.S. companies that have been selected and weighted for positive environmental, social and governance (ESG) characteristics… Portfolio optimization software is used to maximize the fund’s stake in highly rated companies, while also staying true to market-like exposure… The iShares ESG MSCI U.S.A. ETF seeks similar risk and return to the MSCI USA Index, while achieving a more sustainable outcome.

2) Goldman Sachs GS +1% JUST U.S. Large Cap Equity ETF (JUST) has been created to specifically reflect the importance of corporate social responsibility. The ETF tracks an index of U.S.-listed large-cap stocks that are selected through the use of a survey that ranks companies for their practices…

According to JUST Capital… companies [in the index are] more likely to pay their workers a living wage, create jobs in the United States at a greater rate, produce less greenhouse gas emissions, give more to charity and pay less in fines for unethical behavior. This ETF’s launch also was a stunning success.

3) PIMCO Enhanced Short Maturity Active ESG ETF (EMNT). As an actively managed exchange-traded fund, compared to a money market fund, the PIMCO Enhanced Short Maturity Active ESG ETF seeks greater income and total return potential by investing in short-term debt securities with an environmental, social and governance (ESG) screen…

Investors will not solely be exposed to U.S.-based debt… For socially conscious investors… Enhanced Short Maturity Active ESG ETF may be worth consideration.” End quotes.

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End Comment

Well, these are my top news stories and tips for this podcast: “ESG Stock and Fund Picks for July.”

And to get all the links, stock symbols, and more, or to read the transcript of this podcast and with additional information too, please go to investingforthesoul.com/podcasts and scroll down to this episode.

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Thank you for listening.

Talk to you again on July 31. Bye for now.

© 2020 Ron Robins, Investing for the Soul.