Before I began writing for The Motley Fool, which wasn't all
that long ago, I'd never invested -- as in "purchased shares of
stock" -- outside of the standard foray into mutual funds via
various employers. Even after I began writing for the Fool, it took
me a while to figure out the direction I wanted my investing to
That direction turned out to be socially responsible investing,
something that called to me from the start, but that I didn't quite
know how to pursue. In the end, evaluating a company based on both
corporate social responsibility and long-term performance -- now my
primary investing filters -- was just a simple, straightforward
blend of the two: I keep a demanding set of metrics for each side
of the equation, and companies I invest in must max both sides
Most recently, this method led me to invest in what might at
first seem the most unlikely of companies:
Anyway you slice it
For some companies, corporate social responsibility, or CSR, goes
to the very core of the enterprise. Companies like
set as much store by how fairly they pay their suppliers or how
ethically they source their meat as by how much money they
Other companies go the CSR route by grafting a skin of social
responsibility onto their existing corporate bodies. This can be
purely for PR purposes, or for purposes more genuine. Either way,
for me it doesn't matter: So long as CSR is on a company's radar,
and the company is taking positive action as a result, count me in.
Goldman clearly falls into the latter category, but as you're about
to see, the company is up to real good.
10,000 Small Businesses
This is the name of Goldman's $500 million effort to, as the
company puts it on its website, "help small businesses create jobs
and economic opportunity by providing them with greater access to
business education, financial capital, and business support
services." Begun in 2009, 10,000 Small Businesses has three primary
- The bank contributes $200 million to local community colleges
and business schools to fund scholarships and faculty training.
Students get a practical education focusing on skills they can
apply immediately, including accounting, marketing, and
- Through a combination of lending and philanthropic support,
Goldman contributes $300 million to Community Development
Financial Institutions, which will increase the amount of growth
capital available to small businesses in underserved
- Entrepreneurs often face challenges finding networking
opportunities and expert advice.
10,000 Small Businesses
provides these vital services through partnerships with national
and local business organizations and professional services firms,
including those of Goldman itself.
According to the Small Business Association, over the past 15
years, 64% of net new jobs has been generated by small business.
In an economy like the one we're in now, that's a significant
number to consider, and all the more reason to applaud Goldman's
efforts in this arena.
A great company at a fair price
Not quite as evil as you thought? Okay, now let's look now at a few
basic metrics and see how Goldman measures up against its peers as
a business and as an investment.
: In its most recent quarter, Goldman grew its revenue by a
staggering 133% year over year.
grew its revenue by only 5.2%, while
actually contracted by 46.1%.
Bank of America
's contracted too, by 25.5%.
Return on equity:
Goldman's ROE trailing 12 months was 7.64%, a solid performance on
this classic bank-performance metric. JPMorgan came in at an even
better 10.12%. Morgan Stanley is tanking here, with an ROE TTM of
-0.35%. B of A is at least out of the red on this metric, with an
ROE TTM of 2.32%.
: It's always good to see more cash than debt on the balance sheet
-- ideally at least 1.5 times more.
- With $845 billion in cash and $477 billion in debt, Goldman's
C/D is a very healthy 1.77.
- With $890 billion in cash and $710 billion in debt,
JPMorgan's C/D is a respectable, if not ideal, 1.25.
- $592 billion in cash and $392 billion in debt gives Morgan
Stanley the very respectable C/D of 1.51.
- Finally, $625 billion in cash and $647 billion in debt gives
B of A a C/D in need of some help: 0.97.
A happy financial marriage for the new economy
With a P/E of 11, Goldman is also a solid value right now, to boot.
All of this goes to show that making money and making a difference
don't have to be mutually exclusive, even for the Great Vampire
In fact, the new economy not only rewards the blending of the
two, but practically demands it. Consumers are becoming more and
more socially conscious, and they want the goods and services they
use to measure up. In truth, it doesn't take much. A simple action
that costs a company very little or nothing at all can make a real
difference in the mind of the consumer, and the company's bottom
Goldman goes above and beyond this minimum standard, however,
and backs up its focus on maximizing profits with genuinely good
deeds. For me, four shares of Goldman isn't much, but its a start,
and one I intend to build on.
While you're here and in the market (no pun intended) for more
great performing, socially responsible investments, check out
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. In it, our analysts walk you through the must-know items for
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owns shares of Goldman Sachs, Starbucks, and Whole Foods.
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The Motley Fool owns shares of Bank of America Corporation,
Whole Foods Market, and JPMorgan Chase. The Fool owns shares of and
has written puts on Starbucks.
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