Millennials are known for two things when it comes to working: They’re very picky about the type of company they work for, and they’re not afraid to move around until they find the right work environment.
As a result, companies looking to hire those people in the workforce born between 1980 and 1996, must be exceptionally good at keeping this cohort engaged and excited about the work they do.
A May 2016 study by the Gallup Organization highlighted some of the things millennials want from a new job.
“Millennials place a greater emphasis on opportunities to learn and grow and opportunities for advancement…,” stated Gallup’s Brandon Rigoni and Amy Adkins in the Harvard Business Review. “Contrary to popular perception, Millennials place little importance on a company encouraging creativity or being a fun, informal place to work.”
At the end of the day companies that work hard at understanding what motivates millennials will do a better job keeping them around long enough to benefit from their skills and talents.
Who are some of the best companies for Millennials to work for?
Fortune, in conjunction with Great Places to Work, has a list of the top 100 workplaces for millennials. Here are seven that also make great stocks to own.
Stocks to Buy for a Millennial Workforce: Ultimate Software (ULTI)
Ultimate Software (NASDAQ:ULTI) is a Florida-based tech company with 1,512 millennials accounting for 38% of its workforce.
The company itself provides cloud-based human capital management (HCM) solutions for human resources departments in the U.S. and elsewhere.
In 2017, the company grew revenues by 20% to $941 million with 85% of it recurring in nature. In 2018, it will easily go over $1 billion in revenue for the first time in its history.
“At the close of 2017, we had 4,208 UltiPeeps,” stated CEO and Founder Scott Scheer in Ultimate Software’s 2017 annual report. “Our employee retention rate was 94% for the year and is unusually high for the technology sector.”
You can’t keep growing without retaining a good portion of your employees. Ultimate Software’s stock is up 30% year to date through August 6.
There are other good HCM bets out there, but when you’ve been named the best place for Millennials to work, I think that gives it a leg up on much of the competition.
Stocks to Buy for a Millennial Workforce: Hyatt Hotels (H)
Hyatt Hotels (NYSE:H) employs 14,160 millennials, accounting for 40% of its workforce. Controlled by Chicago’s Pritzker family, the hotel business isn’t nearly as interesting as learning about what all the Pritzker clan are doing with their wealth and privilege.
However, as a CEO in the hotel business, Mark Hoplamazian realizes that many of his employees have bigger issues to overcome than having a friendly workplace.
Hyatt is a company that supports its employees by standing behind the issues that are important to them.
“There have been many instances, such as gay marriage in Illinois — where Hyatt is headquartered, with a lot of hotel operations — or the DACA issue, which reflected our values,” Hoplamazian told Fortune recently. “The level of engagement and consciousness elevated over time because more people are finding a voice directly in the workplace or on social media.”
Millennials feel strongly about their beliefs and the fact Hyatt allows them to express those beliefs is a big plus for investors because when employees are taken care of, they’re more likely to take care of the customers and guests.
Hyatt stock is up 8% year to date through August 6 and 31% over the past 52 weeks. Unless the economy comes to a grinding halt, I see more gains in the second half of 2018.
Stocks to Buy for a Millennial Workforce: Progressive (PGR)
Coming in at 10th spot on the list of 100 best workplaces for millennials is Progressive Insurance (NYSE:PGR), one of America’s leading property and casualty insurers.
Although the company doesn’t provide the number of millennials that work at the company, I know from previous articles I’ve written about it, that it cares deeply about workplace diversity.
Progressive is one of only 24 S&P 500 companies that have a female CEO. That number is way too low given women make up almost half the workforce.
Progressive CEO Tricia Griffith is so confident about her company’s ability to provide the best property and casualty insurance that it’s providing free quotes from competitors so visitors to its website can make a more educated buying decision.
I first recommended Progressive stock in October 2016; it’s nearly doubled since that time.
Up 11% year to date through August 6, Progressive hasn’t had a negative, calendar-year total return since 2008. I don’t see why that streak shouldn’t continue with a capable woman taking the top role in 2016.
Stocks to Buy for a Millennial Workforce: Capital One (COF)
Capital One Financial (NYSE:COF) has 20,171 millennials working for it accounting for 49% of its workforce. Ranked the 17th best place to work for millennials, Capital One is still run by founder and CEO Richard Fairbank, who’s grown the company from financial startup to one of the country’s 100 largest companies.
Founder-led companies tend to outperform the indexes delivering investment returns three times as great.
Recently, Walmart (NYSE:WMT) decided to end its credit card partnership with Synchrony Financial (NYSE:SYF) after 20 years to go with Capital One — a coup that reverberated around the banking world.
Analysts expect the Walmart deal to add 3%-4% to its bottom line come 2019 when the partnership with Synchrony expires.
While it won’t be a game changer for Capital One; every little bit helps.
As long as the economy remains strong, Capital One’s short-term loans will continue to be repaid resulting in fewer charge-offs and greater profits.
Until the economic tides turn, Capital One is a great stock to own.
Stocks to Buy for a Millennial Workforce: Pinnacle Financial (PNFP)
Although Pinnacle Financial Partners (NASDAQ:PNFP) likes to hire experienced professionals, the Tennessee-based community bank still has managed to hire 458 millennials who account for 20% of the company’s overall workforce.
That’s pretty darn good for a bank that prides itself on experience.
Of all the companies on my list of stocks to buy, Pinnacle is probably the worst performer of the bunch in 2018, down 4% year to date through August 6.
If you’re going to buy on the dip, PNFP might very well be one of your best options in the regional banking arena.
In mid-July Pinnacle reported Q2 2018 earnings that were off the charts with earnings per share of $1.15, 37% higher than a year earlier thanks to its $2 billion purchase of the Bank of North Carolina in June 2017.
As a result of its purchase, Pinnacle now does business in all of the major cities located in North Carolina. The added hubs have contributed organic loan growth of $2.3 billion since closing its merger with the Bank of North Carolina.
Pinnacle might be stronger today than it’s ever been.
Stocks to Buy for a Millennial Workforce: Intuit (INTU)
As a long-time user of Intuit’s (NASDAQ:INTU) cloud-based Turbo Tax products, I’m well aware of Intuit’s strengths as a company.
However, I did not realize that it employs 2,348 millennials, which accounts for 37% of its overall headcount. That’s not the highest percentage of millennials on my list, but it’s not the lowest either.
Regardless, it’s doing enough to rank it the 35th best place for millennials to work, which is still pretty good in my books.
To accommodate its customers during tax season, Intuit is moving away from its own hosting platforms to 100% cloud-based platforms like the one I used in April to complete my taxes.
It’s a move that also benefits Amazon’s (NASDAQ:AMZN) AWS business which is hosting Intuit sites for the company.
In fiscal 2018, Intuit expects to generate revenues and non-GAAP operating profits of $5.9 billion and $2.0 billion respectively with non-GAAP earnings per share growing by 25% year over year.
INTU stock isn’t cheap at 38 times 2018 earnings, but the good ones rarely are. Generating more free cash flow than it ever has, I like its prospects a lot.
Stocks to Buy for a Millennial Workforce: FedEx (FDX)
I guess it makes sense that FedEx (NYSE:FDX) employs 118,624 millennials, accounting for 42% of its entire workforce. After all, those larger packages sent by ground can get heavy, requiring more youthful frontline employees to get the job done.
However, you’re not going to keep those younger employees if you don’t treat them right. Fortunately, for FDX shareholders, Fred Smith and company do just that.
FedEx, much like Starbucks (NASDAQ:SBUX), believes in treating all employees well whether they’re full-time or part-time.
In addition to treating employees well, the company is all-in when it comes to greening its Chinese operations. On August 1, the company announced that it had added 48 electric vehicles to its China fleet.
The vehicles will reduce the amount of gas used in a single year by 2,500 liters while reducing carbon emissions by almost seven tons.
President Trump might not care about being green, but FedEx does, and that’s just good business.
I’ve been a fan of FedEx stock since 2011. If you can only own one of the two big courier stocks, I’d go with Fred Smith every day of the week.
As of this writing Will Ashworth did not hold a position in any of the aforementioned securities.
