It Pays to Be Happy: 10 Profitable Stocks With High Employee Ratings

It Pays to Be Happy: 10 Profitable Stocks With High Employee Ratings

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Do you subscribe to the idea that happy employees lead to happy shareholders? Here we present a list of publicly traded companies that score highly on employee ratings and have more profitable margins than their industry average. 

PROFITABLE MARGINS

We began by screening for firms more profitable than their industry average on the basis of trailing twelve month (TTM) gross, operating and pre-tax margins.

TTM Gross margin: This metric that tells us the percentage of a company’s revenue is left after paying all production expenses. Costs include overhead, payroll and taxation. ((Revenues – cost of goods sold) / Revenue) *100 = Gross margin %

TTM Operating margin: This tells us the percentage remaining after all operating expenses are paid. Operating expenses include: supplies, repairs, research and development, and depreciation. (Operating Income / Net Operating Revenue) *100 = Operating Margin %

TTM Pretax margin: A company’s earnings before taxes. This incorporates all of the expenses associated with business excluding taxes. It can help to determine the overall operating efficiency of the firm. The higher the pretax margin, the more profitable the company. (Net profit before taxes / net sales) *100 = Pretax Margin

EMPLOYEES

Next, we looked for a fundamental reason these stocks are performing so well compared to their industry peers. Perhaps there is wisdom in the idea that happy employees make productive employees and thriving companies.

With this in mind we used CSRHub's database to identify the top rated companies in the area of Employees. The Employees score is calculated by aggregating ratings in the area of diversity, labor rights, treatment of unions, compensation, benefits, training, health, and worker safety. On a scale of 0-100, 100 being the highest, we pulled the top ten names that overlapped with our profitable names, all with scores above 60.

We approached this list with the CSRHub user average profile, which represents the average importance placed on the four main categories, Community, Employees, Environment, and Governance. This helps to compile the overall score also listed below.  

Business Section: Investing Ideas

Do you think these profitable stocks are boosted by their treatment of employees? Use this list as a starting point or your own analysis. List Average 1-Year Return: 19%.

Interactive chart: On average, analysts seem to agree these stocks are worth considering. Click play to see how ratings have changed in the past two years:

1. Companhia de Bebidas Das Americas (AMBEV) (ABV, Earnings, Analysts, Financials): Engages in the production, distribution, and sale of beer, draft beer, carbonated soft drinks, malt, and other non-alcoholic and non-carbonated products in the Americas. Market cap at $129.06B, most recent closing price at $41.20.

TTM gross margin at 68.07% vs. industry average at 59.21%. TTM operating margin at 40.48% vs. industry average at 23.43%. TTM pretax margin at 40.48% vs. industry average at 22.42%.  

Employee rating at 72. Overall score at 57. 

2. 3M Co. (MMM, Earnings, Analysts, Financials): Operates as a diversified technology company worldwide. Market cap at $74.43B, most recent closing price at $107.84.

TTM operating margin at 21.61% vs. industry average at 14.16%. TTM pretax margin at 21.18% vs. industry average at 13.%.  

Employee rating at 67. Overall score at 63. 

3. Rockwell Collins Inc. (COL, Earnings, Analysts, Financials): Engages in the design, production, and support of communications and aviation electronics for commercial and military customers worldwide. Market cap at $8.8B, most recent closing price at $64.89.

TTM gross margin at 40.06% vs. industry average at 25.51%. TTM operating margin at 19.39% vs. industry average at 12.09%. TTM pretax margin at 17.89% vs. industry average at 9.05%.  

Employee rating at 65. Overall score at 59. 

4. Intercontinental Hotels Group plc (IHG, Earnings, Analysts, Financials): Owns, manages, franchises, and leases hotels and resorts. Market cap at $8.14B, most recent closing price at $30.49.

TTM gross margin at 57.93% vs. industry average at 36.46%. TTM operating margin at 33.02% vs. industry average at 18.98%. TTM pretax margin at 30.3% vs. industry average at 15.93%.  

Employee rating at 65. Overall score at 60. 

5. Praxair Inc. (PX, Earnings, Analysts, Financials): Engages in the production, sale, and distribution of industrial gases primarily in North America, South America, Europe, and Asia. Market cap at $33.61B, most recent closing price at $113.66.

TTM gross margin at 43.06% vs. industry average at 37.16%. TTM operating margin at 21.9% vs. industry average at 16.15%. TTM pretax margin at 20.43% vs. industry average at 13.96%.  

Employee rating at 65. Overall score at 61. 

6. Monsanto Co. (MON, Earnings, Analysts, Financials): Provides agricultural products for farmers in the United States and internationally. Market cap at $57.22B, most recent closing price at $107.19.

TTM gross margin at 56.54% vs. industry average at 37.16%. TTM operating margin at 25.17% vs. industry average at 16.15%. TTM pretax margin at 24.34% vs. industry average at 13.96%.  

Employee rating at 63. Overall score at 48. 

7. Pinnacle West Capital Corporation (PNW, Earnings, Analysts, Financials): Provides retail and wholesale electric services primarily in the State of Arizona. Market cap at $6.67B, most recent closing price at $60.67.

TTM gross margin at 38.56% vs. industry average at 29.08%. TTM operating margin at 26.45% vs. industry average at 18.95%. TTM pretax margin at 20.96% vs. industry average at 12.82%.  

Employee rating at 62. Overall score at 60. 

8. JPMorgan Chase & Co. (JPM, Earnings, Analysts, Financials): Provides various financial services worldwide. Market cap at $182.59B, most recent closing price at $48.18.

TTM gross margin at 86.99% vs. industry average at 61.81%. TTM operating margin at 51.22% vs. industry average at 35.11%. TTM pretax margin at 29.07% vs. industry average at 18.53%.  

Employee rating at 61. Overall score at 55. 

9. Taiwan Semiconductor Manufacturing Co. Ltd. (TSM, Earnings, Analysts, Financials): Engages in the computer-aided designing, manufacturing, packaging, testing, and selling integrated circuits and other semiconductor devices; and manufacturing masks. Market cap at $101.38B, most recent closing price at $19.55.

TTM gross margin at 73.85% vs. industry average at 60.8%. TTM operating margin at 35.64% vs. industry average at 20.18%. TTM pretax margin at 35.93% vs. industry average at 18.73%.  

Employee rating at 61. Overall score at 61. 

10. Southern Company (SO, Earnings, Analysts, Financials): Operates as a utility company that provides electric service in the southeastern United States. Market cap at $40.72B, most recent closing price at $46.76.

TTM gross margin at 37.76% vs. industry average at 29.08%. TTM operating margin at 26.99% vs. industry average at 18.95%. TTM pretax margin at 19.57% vs. industry average at 12.82%.  

Employee rating at 60. Overall score at 57. 
 

 

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5 responses to “It Pays to Be Happy: 10 Profitable Stocks With High Employee Ratings”

  1. Thank you very much for writing such an interesting article on this topic.

  2. Lewis says:

    I must admit that I would like to work in such a company, especially as this study reflect that employees of these companies are happy at work. It is very important to feel good at work and I'm looking for a professional environment for my personal development .

  3. thank you for sharing, I found very useful info here, I was delighted to find this web site

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  5. Samuels says:

    You have shared an informative post and I think it will be very helpful to concentrate more on stocks. Knowing completely about these 10 Profitable Stocks with High Employee Ratings will be a great support and also it gives some energy to move forward.

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