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Invest in these Great Places to Work

Companies that treat their workers well are increasingly being viewed as good investments.

Job perks that are good for workers – think competitive wages and benefits, a healthy work-life balance, ample family and sick leave, and a workplace culture committed to diversity and equal pay – also tend to boost a company’s bottom line. “Investing in your employees is going to pay off in the long haul,” says Jade Huang of Calvert Research and Management.

Given that, here are companies that are great places to work and great investments, notes Adam Shell, Kiplinger's Personal Finance.

Home Depot (HD): Employees at the leading home-improvement chain were deemed essential workers during the pandemic, which meant the retailer’s 413,000 store associates had to report to work instead of working remotely or sheltering in place. But executives took steps to protect workers during the pandemic, says Derek Deutsch with ClearBridge Investments. Home Depot was one of 100 businesses recognized as “America’s Most Just Companies,” a list compiled in October by nonprofit Just Capital.

But executives took steps to protect workers during the pandemic, says Derek Deutsch with ClearBridge Investments. Home Depot was one of 100 businesses recognized as “America’s Most Just Companies,” a list compiled in October by nonprofit Just Capital.

The investment thesis for Home Depot shares remains sound. Americans are spending less on meals out, travel and entertainment – but more on home improvements. Analysts expect Home Depot to increase revenues by nearly 18% and earnings per share by 15% for the fiscal year ended in February 2021, according to earnings tracker Refinitiv.

Mastercard (MA): Credit card payment processor Mastercard is on the right side of the global move away from paper money to digital payments. It is also on the side of its nearly 19,000 employees.

Among companies in the S&P Global 1200 stock index, Mastercard ranks in the top 20 in terms of human capital management, according to Sustainalytics, an ESG ratings firm. Mastercard, which last year expanded its parental leave benefit to 16 weeks, also scores highly when viewed through a diversity lens, with four women on the board.

Mastercard is poised to profit from growth in e-commerce and digital payments, which has accelerated during the pandemic. Mastercard saw contactless payments rise to 41% of in-person transactions during the third quarter, up from 30% in the same period in 2019.

Salesforce.com (CRM): That Salesforce has a “chief equality officer” and a “chief people officer” speaks volumes about its commitment to its 49,000 employees. Salesforce ranks fourth on the 2020 “World’s Best Workplaces” list, published by corporate consultant Great Place to Work.

For investors, Salesforce is a growth juggernaut. For eight straight years, tech consulting firm Gartner has ranked Salesforce first in the large and fast-growing customer relationship management market, in terms of market share measured by revenues. Last August, keepers of the Dow Jones industrial average added Salesforce to the blue-chip stock index.

Starbucks (SBUX): The importance of treating its public-facing workers well is not lost on the giant coffee chain’s leader. The company recently announced a round of pay hikes taking effect late last year. Since the pandemic, Starbucks has rolled out a program that gives all U.S. employees access to 20 free sessions a year with a mental health therapist. It has established a $10 million relief fund that offers one-time grants to employees facing financial hardships.

For investors, Starbucks has not been immune to COVID-19. For the fiscal year that ended in September, Starbucks reported a 14% drop in comparable-store sales globally. But fiscal 2021 is shaping up to be a better year. Analysts expect the company’s earnings to more than double, to $2.81 per share, in fiscal 2021 compared with the previous year. Sales are expected to increase 21%, to $28.5 billion, over the same period.

Target (TGT): Target is another essential business that stayed open to keep customers stocked with everyday staples even as COVID-19 shut down broad swaths of the economy. Target thanked its 350,000 front-line workers by twice doling out bonuses of $200 during the pandemic. It also followed through on a move outlined in 2017 to boost the pay of new hires to $15 an hour.

Target’s digital sales skyrocketed 155% in its third quarter, and earnings more than doubled compared with the same period a year ago. When results are posted for the fiscal year ending January 31, analysts expect a 42% jump in earnings per share; sales should tack on 18%, according to Refinitiv.

Editor’s Note: Adam Shell is an associate editor at Kiplinger’s Personal Finance magazine, www.Kiplinger.com.

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