By Mary-Lynn Cesar for KapitallWire
Democrats are pushing for a minimum wage hike, so we found outperforming stocks with high employee ratings.
Workers in the US and abroad saw several challenges and minor victories in 2013. The April collapse of the eight-story Rana Plaza factory in Bangladesh became the worst disaster in the history of the garment industry, killing more than 1,100 people.
Eight months after the tragedy, The New York Times reports that only four brands – Bonmarché, El Cortes Inglés, Loblaw (LBLCF), and Primark – have agreed to contribute to the victims’ compensation fund, less than half the number of retailers that had clothing produced in the factory.
In the US workers rights became a major issue for a handful of the biggest companies in the country. In November, Boeing (BA) employees rejected an eight-year labor contract extension that would preserve Boeing’s 777X program in Washington State in exchange for some cuts to pensions and benefits. Since then, 22 states have submitted bids for the 777X project, which Boeing could soon move elsewhere.
In Delaware, Amazon.com (AMZN) equipment maintenance and repair technicians are taking steps towards bringing a union to the e-commerce titan’s fulfillment center. Amazon, which is strongly opposed to organized labor, has agreed to a union election scheduled for January 15. However only a small number of the facility's 1500+ workers will be allowed to participate.
And in a nationwide movement that began in 2012, fast-food workers went on strikes throughout the year in protest of low, often unlivable pay. Workers at chains including Burger King (BKW), KFC (YUM), McDonald’s (MCD), and Wendy’s (WEN) who usually receive the federal minimum wage of $7.25 an hour are calling for a wage increase to $15 an hour.
Higher minimum wage ahead
The Federal minimum wage has remained at $7.25 an hour since 2009, when it increased from $6.55. In his State of the Union address last year, President Obama called on Congress to boost the minimum wage to $9 an hour. Last month, President Obama backed a higher minimum wage of $10.10 as proposed by the Harkin-Miller bill, also known as the Fair Minimum Wage Act.
Although Congress has yet to make headway on the Fair Minimum Wage Act, 13 states raised the wage floor on January 1. In Connecticut, New Jersey, New York, and Rhode Island, voters and lawmakers backed a bump in minimum wages, which, as of Wednesday, fall between $8 (Rhode Island and New York) and $8.70 (Connecticut) in 2014.
Arizona, Colorado, Florida, Missouri, Montana, Ohio, Oregon, Vermont, and Washington increased their wages on Wednesday due to annual cost of living adjustments and the wages now range from $7.50 (Missouri) to $9.80 (Oregon).
The ongoing struggle for better working conditions inspired us to look for stocks that have received positive remarks from their employee relations. To create the list below, we turned to CSRHub, a database for corporate social responsibility that awards companies scores in different categories. We screened for companies with employee ratings of 75 or higher. Scores on CSRHub are converted into a rating from 0-100, with 100 being the most positive.
CSRHub compiles employee rankings from data provided in three subcategories: Compensation and Benefits, Diversity and Labor Rights, and Training, Safety, and Health.
After obtaining a list of companies with high employee ratings, we then turned our attention to numbers in the market and looked for stocks that are rallying above their 20-day, 50-day, and 200-day moving averages (MA), which indicates that these stocks have strong upward momentum.
Next, we decided to provide some context by incorporating a metric that analyzes past performance. We screened for stocks that have outperformed over the last quarter, with at least a 15% return.
We were left with three stocks on our list.
Click on the chart below to see data over time.
Do you think there's a connection between these companies' treatment of their employees and their high quarterly performances? Use this list as a starting point for your own analysis.
1. World Wrestling Entertainment Inc. (WWE, Earnings, Analysts, Financials): Engages in the sports entertainment business as an integrated media and entertainment company.
Market cap at $1.24B, most recent closing price at $16.59.
Performance over the last quarter at 60.96%.
The stock is currently rallying 11.93% above its 20-day MA, 21.54% above its 50-day MA, and 56.48% above it 200-day MA.
Employee Rating: 76. Its strength is in Compensation and Benefits, where the company has a rating of 84. World Wrestling Entertainment has a rating of 63 in Diversity and Labor Rights and a rating of 80 in Training, Health, and Safety.
2. Jones Lang Lasalle Inc. (JLL, Earnings, Analysts, Financials): Provides integrated real estate and investment management services to owner, occupier, and investor clients worldwide.
Market cap at $4.57B, most recent closing price at $102.80.
Performance over the last quarter at 16.73%.
The stock is currently rallying 2.36% above its 20-day MA, 6.85% above its 50-day MA, and 10.96% above it 200-day MA.
Employee Rating: 76. Its strengths are in Compensation and Benefits and Diversity and Labor Rights, where the company has ratings of 78. Jones Lang Lasalle has a rating of 75 in Training, Health, and Safety.
3. Alkermes plc (ALKS, Earnings, Analysts, Financials): Provides extended-release injectable and oral products for the treatment of prevalent and chronic diseases, such as central nervous system disorders, reward disorders, addiction, diabetes, and autoimmune disorders.
Market cap at $5.52B, most recent closing price at $40.58.
Performance over the last quarter at 21.28%.
The stock is currently rallying 0.82% above its 20-day MA, 6.07% above its 50-day MA, and 24.85% above it 200-day MA.
Employee Rating: 76. Its strength is in Training, Health, and Safety, where it has a rating of 85. Alkermes has a rating of 75 in Compensation and Benefits and a rating of 68 in Diversity and Labor Rights.
(List compiled by Mary-Lynn Cesar.Employee ratings sourced from CSRHub. Quarterly sales data sourced from Zack's Investment Research. All other data sourced from Finviz.)
Analyze These Ideas: Getting Started
Dig Deeper: Access Company Snapshots, Charts, Filings