9 Profitable Stocks with High Environmental Rankings

9 Profitable Stocks with High Environmental Rankings

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Environmental rankings may matter more to investors, since it's even less likely we didn't cause climate change. 

On Friday, the UN’s Intergovernmental Panel on Climate Change (IPCC) issued a report stating that it is extremely likely – at least 95% probable – that human behavior has been the primary contributing factor to global warming since the mid-twentieth century.

The Climate Change 2013: the Physical Science Basis found that severe changes in the climate have occurred since 1950, noting that “the last three decades have been successively warmer at the Earth’s surface than any preceding decade since 1850.”

The IPCC’s latest report is the first of four that will make up the scientific body’s latest assessment report on climate change, which will be released at the end of October 2014. The to-be-issued report will be the IPCC’s fifth assessment in 24 years, and with each report, the IPCC has increased the likelihood that human activities are the driving force behind recent global warming:

  • 1990 – “the observed increase could be largely due to this natural variability, alternatively this variability and other human factors could have offset a still larger human-induced greenhouse warming.”

  • 1995  -  “the balance of evidence suggests a discernible human influence on global climate.”

  • 2001 – "there is new and stronger evidence that most of the warming observed over the last 50 years is attributable to human activities.”

  • 2007 – “most of the observed increase in global average temperatures since the mid-20th century is very likely due to the observed increase in anthropogenic greenhouse gas concentrations.”

Investing ideas

Given the IPCC’s findings on the human impact on climate change, we decided to take a look at companies that have embraced environmentally friendly or sustainable practices as part of their operations. We specifically chose to focus on companies with encouraging accounting information to show that going “green” doesn’t have to hurt the bottom line.

To begin, we created a universe of stocks that ranked in the 70th percentile or higher in Environment rankings on CSRHub. We then screened that list for stocks as indicated by rising gross profit margins year-over-year for the last three years. Gross margin is the percentage of profit a company makes for each dollar it generates in sales, after deducting production expenses. Examples of these expenses include operating costs, payroll, and taxes.

Gross Margin = Gross Profit / Revenue

The higher the percentage, the greater the gross profits a company takes from its revenue. When a company has rising gross margins, it indicates that the firm is in control of its costs.

We were left with nine stocks with high environment rankings on our list.

Click on the interactive chart below to see sales data over time.


Do you think these stocks will continue to increase their gross margins? Use this list as a starting point for your own analysis.

1. UTStarcom Holdings Corp. (UTSI, Earnings, Analysts, Financials): Designs and sells Internet protocol (IP)-based telecommunications infrastructure products to telecommunications service providers and operators worldwide. Market cap at $106.94M, most recent closing price at $2.75.

Gross profit margins increased from 16.82% to 24.09% during the first time interval (12 months ending 2010-12-31 vs. 12 months ending 2009-12-31).

For the second time interval, gross margins increased from 24.09% to 35.66% (12 months ending 2011-12-31 vs. 12 months ending 2010-12-31).

And for the final time interval, gross margins increased from 35.66% to 36.5% (12 months ending 2012-12-31 vs. 12 months ending 2011-12-31).

Environmental rating: 76.
 

2. Digi International Inc. (DGII, Earnings, Analysts, Financials): Operates as a device networking company that develops products and technologies to connect and manage local or remote electronic devices over a network, via the Internet or via satellite. Market cap at $258.23M, most recent closing price at $9.99.

Gross profit margins increased from 48.98% to 50.51% during the first time interval (12 months ending 2010-09-30 vs. 12 months ending 2009-09-30).

For the second time interval, gross margins increased from 50.51% to 52.21% (12 months ending 2011-09-30 vs. 12 months ending 2010-09-30).

And for the final time interval, gross margins increased from 52.21% to 52.66% (12 months ending 2012-09-30 vs. 12 months ending 2011-09-30).

Environmental rating: 71.
 

3. American Public Education, Inc. (APEI, Earnings, Analysts, Financials): Provides online higher education focused primarily on serving the military and public service communities. Market cap at $667.02M, most recent closing price at $37.80.

Gross profit margins increased from 60.81% to 62% during the first time interval (12 months ending 2010-12-31 vs. 12 months ending 2009-12-31).

For the second time interval, gross margins increased from 62% to 63.43% (12 months ending 2011-12-31 vs. 12 months ending 2010-12-31).

And for the final time interval, gross margins increased from 63.43% to 64.85% (12 months ending 2012-12-31 vs. 12 months ending 2011-12-31).

Environmental rating: 70.
 

4. DineEquity, Inc. (DIN, Earnings, Analysts, Financials): Develops, franchises, and operates full-service restaurant chains in the United States and internationally. Market cap at $1.31B, most recent closing price at $69.00.

Gross profit margins increased from 38.57% to 39.65% during the first time interval (12 months ending 2010-12-31 vs. 12 months ending 2009-12-31).

For the second time interval, gross margins increased from 39.65% to 47.04% (12 months ending 2011-12-31 vs. 12 months ending 2010-12-31).

And for the final time interval, gross margins increased from 47.04% to 57.55% (12 months ending 2012-12-31 vs. 12 months ending 2011-12-31).

Environmental rating: 73.

 

5. Littelfuse Inc. (LFUS, Earnings, Analysts, Financials): Designs, manufactures, and sells circuit protection devices for use in the automotive, electronic, and electrical markets in the Americas, Europe, and the Asia-Pacific. Market cap at $1.74B, most recent closing price at $78.22.

Gross profit margins increased from 29.14% to 38.46% during the first time interval (12 months ending 2011-01-01 vs. 12 months ending 2010-01-02).

For the second time interval, gross margins increased from 38.46% to 38.6% (12 months ending 2011-12-31 vs. 12 months ending 2011-01-01).

And for the final time interval, gross margins increased from 38.6% to 38.7% (12 months ending 2012-12-29 vs. 12 months ending 2011-12-31).

Environmental rating: 75.

 

6. Pier 1 Imports, Inc. (PIR, Earnings, Analysts, Financials): Operates as an importer and specialty retailer of imported decorative home furnishings and gifts in the United States, Canada, and Mexico. Market cap at $2.06B, most recent closing price at $19.52.

Gross profit margins increased from 34.12% to 39.77% during the first time interval (12 months ending 2011-02-26 vs. 12 months ending 2010-02-27).

For the second time interval, gross margins increased from 39.77% to 42.46% (12 months ending 2012-02-25 vs. 12 months ending 2011-02-26).

And for the final time interval, gross margins increased from 42.46% to 43.58% (12 months ending 2013-03-02 vs. 12 months ending 2012-02-25).

Environmental rating: 86.
 

7. Booz Allen Hamilton, Inc. (BAH, Earnings, Analysts, Financials): Provides professional services primarily to US government agencies in the defense, security, and civil sectors, as well as to corporations, institutions, and not-for-profit organizations. Market cap at $2.67B, most recent closing price at $19.32.

Gross profit margins increased from 48.19% to 49.26% during the first time interval (12 months ending 2011-03-31 vs. 12 months ending 2010-03-31).

For the second time interval, gross margins increased from 49.26% to 49.92% (12 months ending 2012-03-31 vs. 12 months ending 2011-03-31).

And for the final time interval, gross margins increased from 49.92% to 50.14% (12 months ending 2013-03-31 vs. 12 months ending 2012-03-31).

Environmental rating: 71.
 

8. Teledyne Technologies Inc. (TDY, Earnings, Analysts, Financials): Provides electronic components, instruments, and communications products in the United States and Canada. Market cap at $3.17B, most recent closing price at $84.93.

Gross profit margins increased from 28.74% to 30.17% during the first time interval (52 weeks ending 2011-01-02 vs. 53 weeks ending 2010-01-03).

For the second time interval, gross margins increased from 30.17% to 33.53% (52 weeks ending 2012-01-01 vs. 52 weeks ending 2011-01-02).

And for the final time interval, gross margins increased from 33.53% to 35.17% (52 weeks ending 2012-12-30 vs. 52 weeks ending 2012-01-01).

Environmental rating: 71.
 

9. FEI Company (FEIC, Earnings, Analysts, Financials): Supplies instruments for nanoscale imaging, analysis, and prototyping that enable research, development, and manufacturing in industrial, academic, and research institutional applications. Market cap at $3.47B, most recent closing price at $87.80.

Gross profit margins increased from 39.75% to 42.46% during the first time interval (52 weeks ending 2010-12-31 vs. 52 weeks ending 2009-12-31).

For the second time interval, gross margins increased from 42.46% to 44.45% (52 weeks ending 2011-12-31 vs. 52 weeks ending 2010-12-31).

And for the final time interval, gross margins increased from 44.45% to 46.61% (52 weeks ending 2012-12-31 vs. 52 weeks ending 2011-12-31).

Environmental rating: 70.

 

 

(List compiled by Mary-Lynn Cesar. Environmental data sourced from CSRHub. Gross margin data sourced from Google Finance. Quarterly sales data sourced from Zacks Investment Research. All other data sourced from Finviz.)

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