For the past seven years, Glassdoor.com has announced a list of the “50 Best Places to Work” based reviews current and former employees of each company have submitted. The results give outsiders a small view into what employees of each company fell and think about their experience at work.
As an investor, employee satisfaction could mean lower turnover, greater innovation, or more productivity to mention a few, which could lead to greater profits and higher share prices.
With that in mind, let’s take a look at five of the best publicly traded companies to work for and determine whether being a great place to work translates into being a great stock to own.
Google Inc. (GOOG, GOOGL)
Glassdoor.com’s best publicly traded company to work for in 2015, as voted on by employees was Google Inc. (NASDAQ:GOOG, NASDAQ:GOOGL). “Freedom,” “respect,” “smart,” “caring,” “impactful,” “challenging” and “great benefits” are just some of the words and phrases repeated over and over again when you read the reviews from current and former Google employees.
From an investor’s standpoint, happy employees have translated into long-term happiness for shareholders. Google stock has beaten the S&P 500 by about 5 percentage points over the past five years, though it’s lagging in the past 52 weeks, down roughly 5% versus a 15% gain for the S&P 500.
The company’s incredible culture and willingness to give its employees the freedom to explore and try new ideas, as crazy as they may seem, has led to things like Google Glass, advances in driverless cars and other technological feats. And those ultimately could be the kinds of projects that really push the needle on Google in the future.
Nestle Purina PetCare (Subsidiary of Nestle)
Nestle Purina PetCare, a subsidiary of Nestle SA (OTCMKTS:NSRGY), develops pet products intended to improve the lives of cats, dogs and other pets throughout the world. Among words often repeated in employee reviews are “cultured,” “aspired,” “work life balance,” “genuinely care,” “benefits” and “challenged.”
However, similar to Google, NSRGY has underperformed the broader market, roughly flat to the S&P 500’s gains in the past year, and up 60% to the S&P’s 85%.
But the divergence between the happy employees at Purina Petcare and Nestle’s relatively disappointing share price can be explained in scale — namely, the pet care division that won the award is just a small piece of the whole Nestle empire, accounting for just about 12% of sales.
So really, no matter how happy or productive Purina Petcare’s workers might be, there’s only so much that one division can push NSRGY stock.
F5 Networks, Inc. (FFIV)
Rank: No. 4 overall
Rating: 4.3 out of 5 stars
F5 Networks, Inc. (NASDAQ:FFIV) is a business software and services technology company. F5 mainly focuses on networking products which will help optimize security, performance and availability of network applications, servers and storage for its clients. “Integrity,” “value,” “opportunity,” “perks” and “compensations” are just a few of the key words repeated in F5 employee’s reviews.
Shareholders of F5 don’t have much room to complain about how things are run at F5. FFIV’s five-year performance is some 30 percentage points better than the market, though the S&P 500 is up twice as much as FFIV through about a month into 2015.
F5 Networks operates in an industry were employee knowledge and experience makes all the difference. Without the top engineers, F5 would not exist or be able to compete in the industry its operating in, making employee satisfaction a must.
As for now, F5 management seems to understand the importance of their people. If new team comes in or the current one loses sight of what is important, investors should take note.
Chevron Corporation (CVX)
Rank: No. 6 overall
Rating: 4.2 out of 5 stars
Chevron Corporation (NYSE:CVX) — as one of the largest companies in the world, and the second-largest oil and gas conglomerate — is a bit of a shocker on this list. Nonetheless, employee reviews often included the terms “encouraged,” “opportunity,” “great benefits,” “wonderful people” and “work life balance,” so clearly CVX belongs.
The S&P 500 has doubled up CVX stock over the past five years, but before you start blaming a lax culture, consider that up until about mid-June of this year, Chevron and the S&P were neck and neck. However, a precipitous decline in oil prices over the past few months slammed most of the energy sector, taking CVX down with it.
It’s really difficult to tell how much of an effect a quality workplace has had on Chevron’s stock performance. But it sure isn’t hard to see how much oil prices matter.
Procter & Gamble Co (PG)
Rank: No. 11 overall
Rating: 4.2 out of 5 stars
Lastly, we have Procter & Gamble Co (NYSE:PG). The behemoth consumer goods company received similar reviews as those given to the previous four companies with talk of culture, benefits, work-life balance and opportunities.
PG stock has been an underperformer over most meaningful time periods … if you’re just counting capital gains. But once you let dividends do their thing over time, that’s when Procter & Gamble really shines. Over the past 15 years, PG stock has put up a total return of about 150% vs. 95% for the S&P 500.
Maybe happy employees simply don’t drop the ball? P&G is among America’s most stable income stocks; it has been around since 1837 and paid dividends uninterrupted since 1891.
As of this writing, Matt Thalman was long GOOG, GOOGL and PG.