Investors are increasingly wanting to reflect their values within their stock market portfolios. There has been a surge in interest in socially conscious investing, and understandably so.
However, not all green companies necessarily make for great investments. As we’ve seen over the past year, shares prices have tumbled in categories such as wind and solar, electric vehicles and hydrogen power operators.
But don’t worry, there are some companies that can be both ecological leaders and also deliver strong profits and dividends to shareholders. These are three leading examples today.
Ecolab (ECL)
Ecolab is the world’s largest player in sanitation and cleaning services for industries such as hospitality and manufacturing. It offers products and services such as chemical cleaning agents, water treatment and recycling, pest control and quality monitoring and assurance.
Ecolab’s key value proposition comes from its size and scope of its offering. A Fortune 500 company can call Ecolab and get one-stop solutions for everything from pest control to water treatment and everything else necessary for keeping a factory safe and in compliance with environmental regulations.
Ecolab CEO Christophe Beck is laser-focused on water sustainability. Ecolab co-founded the Water Resilience Coalition and in a shareholder letter, Beck stated that: “By 2030, we [Ecolab] aim to restore more water than we consume in water-stressed areas, halve our carbon emissions and attain 100% renewable electricity use.” ECL stock is a great example of doing good for both the environment and shareholders.
Enel Chile (ENIC)
Enel Chile (NYSE:ENIC) is one of the large electricity producers in the nation of Chile. It operates as a subsidiary of the Italian firm Enel SpA.
Enel Chile stands out among global electricity firms because it has one of the fastest roadmaps to carbon-free power production. Chile is blessed with many rivers capable of producing large quantities of renewable hydroelectric power.
In addition, Chile’s Atacama Desert has some of the highest solar intensity in the world. This makes solar power investments significantly more profitable for Enel Chile than for most other electricity producers globally.
The cherry on top is that Chile has some of the world’s largest reserves of copper and lithium. This means that Chile will be an integral part of the global electrification move as companies mine these crucial metals to make batteries and other key inputs.
This, in turn, should drive substantial increases in Chile’s economy and demand for electricity. And Enel Chile is a downright cheap growth stock, with shares going for 2.61 times forward earnings. It also offers a large dividend yield.
The Southern Co. (SO)
The Southern Co. (NYSE:SO) is a power utility focused on southern U.S. states such as Georgia and Tennessee. These states have enjoyed reasonably strong economic growth and generally pro-business regulatory environments in recent years, giving Southern a lasting tailwind for growth.
The company has reinvented itself internally. In 2000, Southern generated about 80% of its power from coal-fired units. That figure is now down to less than 20% overall, and Southern will be phasing out its remaining coal units over time.
What is taking their place? In significant part, it is nuclear power. Nuclear stocks are back in vogue, with investors increasingly turning to nuclear as a safe, cheap, always-on, and carbon-free source of baseload power.
As investors appreciate nuclear power assets more, Southern stock should enjoy a rising valuation. In addition, the recent dip in interest rates is a favorable backdrop for utility names, including SO stock in 2024.
On the date of publication, Ian Bezek held a long position in ECL stock. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
