Sustainable Investing
All figures stated in $USD unless otherwise stated
1
Agenda
1.
Trend Overview
2.
Trend Analysis
3.
Historical Performance
4.
Growth Drivers
5.
Stocks
2
Sustainable Investing Overview
Historical Growth
Summary
•
Investments that consider the risk and opportunity
impacts of ESG factors while achieving financial
returns
•
•
•
$30.3 Trillion is invested globally in sustainable
investing assets since 2023
Sustainable investing evolved from ancient ethical
traditions and gained modern traction during the
socially conscious movements of the 1960s and
1970s.
•
Projected U.S. Market CAGR of over 24.1% between
2023 and 2030
First socially responsible investment fund was
launched in 1971 and first ESG index in 1990
•
Sustainable investments assets under management has
grown by 20% since 2020 in Non-US Markets
Types of Sustainable Investing
Negative Screening
Positive Screening
Best-In-Class
Selection
ESG Integration
Thematic Investing
Impact Investing
Source: Harvard Business School Online, GSI Allilance
3
Sustainable Investing Analysis
Why Sustainable Investing?
•
Impact Criteria
Contributes to positive social change by supporting
Environmental
companies that prioritize ESG
•
Deliver competitive financial returns while also
mitigating risk associated with environmental and
Social
social issues.
•
Investors are to capitalize on on emerging market
trends for growing consumer demands for eco-
Governance
friendly products, ethical business practices and social
justice initiatives.
Projected Market Cap Growth (In $USD millions)
890
717
578
466
375
103
127
158
2020
2021
2022
Source: Carbon Collective, GMI Insights
196
2023
244
2024
302
2025
2026
2027
2028
2029
2030
4
Historical Performance
5-Year Historical Performance
100%
95%
80%
81%
60%
40%
20%
0%
-20%
фев.19
авг.19
фев.20
авг.20
фев.21
авг.21
S&P 500 ESG Index (USD)
фев.22
440
5 150
420
4 950
S&P 500
ESG Index
S&P 500
1-Month
3%
3%
400
6-Month
6%
5%
380
22%
360
3-Year
77%
66%
5-Year
95%
81%
4 750
4 550
4 350
360
4 150
340
3 950
320 3 970
фев.23
3 750
июн.23
окт.23
S&P 500 ESG INDEX
Source: Yahoo Finance
авг.23
1-Year Stock Price
Period
25%
фев.23
S&P 500
Historical Financials
1-Year
авг.22
фев.24
S&P 500
5
Growth Drivers
Performance
It has been proven recently that ESG-focused companies are showing greater
returns and proving to be economically strong which is displayed through financial
markets by better risk-adjusted returns.
Purpose/
Awareness
Present-day investors aspire not solely for financial gains, such as profits, but also
aim to direct their wealth towards causes that hold significance to them — a sense
of purpose. This trend leads to amplified rewards, as achieving financial success
aligns with personal fulfillment. While financial gains are quantifiable, the sense of
fulfillment remains subjective.
Regulation
After Covid-19, corporations have been put under serious amounts of stress
regarding the compliance of sustainable regulations. Even before the pandemic
firms were already under considerable regulatory pressure to enhance their
sustainability efforts and take greater responsibility for their actions, but as we
transition into a more sustainable-focused future, surrounding government bodies
will place immense pressure on creating that future.
6
3 Potential Investments
NextEra Energy, Inc.
Applied Materials, Inc.
Microsoft Corporation
7
NextEra Energy Inc.
NYSE : NEE
8
NextEra Energy Inc (NYSE:NEE) - Overview
Key Financials
Company Overview
•
NextEra Energy, Inc. was founded in 1984.
Stock Price
$58.14
•
Primarily operates in the United States, with a focus
on Florida through its subsidiary Florida Power &
Light Company.
52 Weeks Range
$47.15 – $79.78
•
Leading producer of renewable energy, with extensive
wind, solar, and battery storage assets.
Market Cap
$121.01B
•
Committed to reducing carbon emissions and
promoting environmental stewardship across its
operations.
Dividend Yield
3.13%
Beta (5Y)
0.52
Revenue Breakdown
Historical Financials
30B
25B
58%
64%
59%
50%
60%
48%
50%
20B
40%
15B
10B
70%
28B
19B
18B
17B
21B
30%
20%
5B
10%
B
0%
19A
20A
21A
Revenue
22A
23A
Gross Margin
Corporate
Source: Yahoo Finance, NextEra Company Site
FPL
NEER
9
NextEra Energy Inc - Performance & Outlook
120%
100%
81%
80%
60%
34%
40%
20%
0%
-20%
фев.19
авг.19
фев.20
авг.20
фев.21
S&P 500
авг.21
фев.22
авг.22
фев.23
авг.23
NextEra Energy
Strengths & Outlook
•
Performed better than the S&P 500 until as of this year, due to rising interest rates as it put pressure on the company's
financial especially its cash flows and balance sheet. The company's revenue and margins are on a all time high and show no
signs of slowing down
•
ESG Risk Rating of 23.1 which shows that currently it is in the middle of overall rating wise but when compared to its peers
in their industry it is in the top 25 percentile of lowest scores. Industry has an heavy emphasis on ESG but the management
has conditioned their operations well, with extensive exposure and practices in place to make a change.
•
As markets and customer demands change, NextEra Energy continues to take a proactive approach to investing, steadily
growing its portfolio of renewable energy sources and improving grid infrastructure. Through significant investments totaling
$4 trillion through 2050, the corporation prioritizes innovation and technological developments, keeping itself at the forefront
of the clean energy transition and promoting sustainability and operational efficiency throughout its activities.
•
With the worldwide trend toward sustainability and decarbonization picking up steam, NextEra Energy is well-positioned to
maintain its growth and lead the industry. The firm is well-positioned to take advantage of new possibilities in the clean energy
industry thanks to its strategic positioning, sound financial standing, and dedication to innovation. This will create value for
the company's stakeholders and help ensure a more sustainable energy future.
Source: Sustainalytics, NextEra Filings
10
NextEra Energy Inc – Financial Analysis
Forward P/E
EV/EBITDA
Peer Average: 15.8x
Peer Average: 12.2x
12,0x
13,4x
Duke Energy The Southern
Corporation
Company
11,0x
11,7x
Exelon
Corporation
American
Eletric Power
16,1x
12,9x
NextEra
Energy Inc
Current Price: $58.14
•
52 – Week High : $79.78
•
52 – Week Low: $47.15
•
Target Price: $73.16
14,2x
14,2x
17,1x
Duke Energy The Southern
Exelon
American
NextEra
Corporation Company
Corporation Eletric Power Energy Inc
Conclusion
Stock Price Analysis
•
17,3x
•
NextEra Energy offers stability with its strong
financial performance and holds significant growth
potential in the renewable energy sector.
•
NextEra Energy is a desirable option for investors
looking to have an impact on the environment and
increase their financial returns since it is in line with
sustainability goals and the growing need for clean
energy solutions.
BUY at Current Price of $58.14
Source: Capital IQ, Yahoo Finance
11
Applied Materials, Inc.
NYSE : AMAT
12
Applied Materials, Inc. (NYSE:AMAT) - Overview
Key Financials
Company Overview
•
Applied Materials was established in 1967
Stock Price
$168.18
•
Headquartered in Santa Clara, California, USA, with
global operations.
52 Weeks Range
$109.00– $178.40
•
Specializes in manufacturing equipment for the
semiconductor, display, and solar industries
Market Cap
$139.9B
•
Committed to sustainable practices, Applied Materials
invests in energy-efficient technologies and promotes
environmental stewardship.
Dividend Yield
0.76%
Beta (5Y)
1.58
Revenue Breakdown
Historical Financials
30B
48%
47%
47%
25B
47%
46%
20B
45%
15B
44%
10B
5B
47%
15B
45%
23B
26B
27B
44%
43%
17B
42%
B
41%
19A
20A
Revenue
Source: Capital IQ, Applied Materials Website
21A
22A
Gross Margin
23A
Semiconductor Systems
Applied Global Services
Display Markets
Corporate
13
Applied Materials, Inc. - Performance & Outlook
333%
330%
280%
230%
180%
130%
81%
80%
30%
-20%
фев.19
авг.19
фев.20
авг.20
фев.21
S&P 500
авг.21
фев.22
авг.22
фев.23
авг.23
Applied Materials
Strengths & Outlook
•
Stock has performed better than the S&P 500 for most of the last 5 years, with a large increase after 2021, due to its terrific
cash generation and quite reasonable valuation it was able to increase its stock value. The global semiconductor shortage just
meant it was time for Applied Materials to grow as it allowed for more investment in semi-equipment, making it an industry
leader.
•
ESG Risk Rating of 12.8, which is very low for both its industry and in general when compared to all companies. In regard to
its peer, it ranks 3rd lowest in semiconductors, showing that this company has created a foundation in making ESG an impact
and it shows in their stock price.
•
As leaders in the semi-conductor industry, they are constantly increasing the pressure of ESG factors in their day-to-day
operations starting from the top with their semi conductors. Such as achieving 100 % renewable electricity use in the U.S. and
69% globally. With all these factors and the increase of ESG pressures worldwide, we should see Applied Materials grow at an
exceptional rate in the upcoming years
Source: Sustainalytics, Applied Materials Filings
14
Applied Materials, Inc. – Financial Analysis
Forward P/E
EV/EBITDA
Peer Average: 22.8x
Peer Average: 30.0x
31,9x
23,3x
43,4x
21,2x
20,7x
27,1x
16,8x
33,1x
24,9x
21,8x
Lam Research ASML Holding
KLA
Teradyne, Inc.
Applied
Corporation
Corporation
Materials, Inc.
Lam Research ASML Holding
KLA
Teradyne, Inc.
Applied
Corporation
Corporation
Materials, Inc.
Stock Price Analysis
Conclusion
•
Current Price: $168.18
•
52 – Week High : $178.40
•
52 – Week Low: $109.00
•
Target Price: $172.35
•
With both of their financial ratios, the company is
trader cheaper than what it is shown
•
With strong financial health and a keen interest in
further developing their sustainable side of
production, the company is heading towards further
growth
BUY at Current Price of $168.18
Source: Capital IQ, Yahoo Finance
15
Microsoft Corporation
Nasdaq: MSFT
16
Microsoft Corporation (NASDAQ:MSFT) - Overview
Key Financials
Company Overview
•
Founded on April 4, 1975, by Bill Gates and Paul Allen.
•
The company is headquartered in Redmond,
Washington, USA, and operates globally with offices and
data centers in multiple countries.
•
Global technology company renowned for its software
products, cloud services (Azure), hardware (Surface
devices), and gaming (Xbox).
•
Committed to sustainability, investing in renewable
energy to power its operations and setting ambitious
goals to become carbon negative by 2030.
69%
68%
200B
69%
68%
150B
100B
50B
66%
126B
143B
168B
198B
212B
22A
23A
B
19A
20A
Revenue
Source: Capital IQ, Company Website
21A
Gross Margin
$411.22
52 Weeks Range
$245.61 – $415.32
Market Cap
$3.1T
Dividend Yield
0.73%
Beta (5Y)
0.88
Revenue Breakdown
Historical Financials
250B
Stock Price
70%
69%
69%
68%
68%
67%
67%
66%
66%
65%
65%
64%
Server Products
Windows
Other
Office Products
Gaming
17
Microsoft Corporation - Performance & Outlook
307%
280%
230%
180%
130%
81%
80%
30%
-20%
фев.19
авг.19
фев.20
авг.20
фев.21
S&P 500
авг.21
фев.22
авг.22
фев.23
авг.23
Microsoft
Strengths & Outlook
•
Microsoft has been outperforming the S&P 500 for the last 5 years with increasing returns after 2021 and hence again in 2023
and now into 2024. This is mainly due to Microsoft's stellar cash flow, with almost $30 billion in just Q4 of 2023. This pattern
is due to an increase in their innovation, strong leadership, and vision.
•
Safe, low-beta stock which has produced consistent returns over the past 5 years
•
Management is well situated with shareholders and has committed to deliver shareholders returns, enhancing its attractiveness
as a long-term investment option
•
ESG risk rating of 15.2, which is very low for both the industry and in general companies. We again see the effects of having
a strong foundation in ESG does towards the company. Projects such as climate innovation fund which is their main goal of
being carbon negative by 2030 and remove historical carbon by 2050.
•
Has made themselves a ESG powerhouse with seriously committing themselves to sustainable improvements which has
shown the effects from the increase in financial strength from 2022 to 2023.
Source: Sustainalytics, Microsoft Fillings
18
Microsoft Corporation – Financial Analysis
Forward P/E
EV/EBITDA
Peer Average: 21.7x
Peer Average: 29.1x
40,2x
29,0x
25,4x
18,8x
18,9x
Oracle
Corporation
Amazon.com,
Inc.
16,3x
Salesforce, Inc. Alphabet, Inc.
30,9x
21,1x
Microsoft
Corporation
Current Price: $411.22
•
52 – Week High : $415.32
•
52 – Week Low: $245.61
•
Target Price: $449.47
19,8x
Salesforce, Inc. Alphabet, Inc.
Oracle
Corporation
Amazon.com,
Inc.
Microsoft
Corporation
Conclusion
Stock Price Analysis
•
33,7x
•
The strong management backed up with innovated
ideas is driving Microsoft's growth.
•
With heavier emphasis on sustainability and ESG
factors will lead the company to higher returns based
on historical evidence
BUY at Current Price of $411.22
Source: Capital IQ
19
Thank You
20