2 top FTSE 100 ethical stocks

As ethical investing becomes more important for investors, I’m checking out these two top FTSE 100 ESG stocks.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Three generation happy family walking outdoors in park

Image source: Getty Images

The world of investing has never been more ethically conscious, and stocks in the FTSE 100 are not immune to this sentiment. Environmental, social, and governance (ESG) ratings are all the rage right now. Not only do they consider how ‘green’ a company is, but also how it deals with social issues, such as equality and human rights, as well as its own management practices. 

With that in mind, I’m looking into two top ESG plays for me, Coca-Cola HBC (LSE: CCH) and GlaxoSmithKline (LSE: GSK)

Inflation Is Coming

Inflation is out of control, and people are running scared. But right now there’s one thing we believe Investors should avoid doing at all costs… and that’s doing nothing. That’s why we’ve put together a special report that uncovers 3 of our top UK and US share ideas to try and best hedge against inflation… and better still, we’re giving it away completely FREE today!

Click here to claim your copy now!

Coca-Cola HBC

This Switzerland-based bottler of the Coca-Cola product and its ESG rating have me asking myself if I should invest

It has consistently ranked at the top of the FTSE4GOOD Index series since its inception in 2000. This is due to its advancements in working with recycled materials. By 2025 it plans to be using 50% recycled PET (the type of plastic it uses for packaging) in its European operations and 30% across the company as a whole.

Due to the pandemic, sales fell 12.7% to €6.1bn in 2020, but things are looking up. As vaccinations continue across the world, I’m growing more bullish on the stock and its recovery. In a recent statement, the company said: “We expect to see a strong FX-neutral revenue recovery in 2021”. This has led analysts to provide expectations of revenue growth of 8.3% and 6.7% for FY21 and FY22, respectively.

There is still the risk of renewed Covid-19 cases though, which would throw a spanner in the works of any recovery. Considering the rapidly growing infection rates across major European countries, it’s very possible that business could take another hit. 

The Coca-Cola HBC price is currently 2,488p, up 27% in the past year from a price of 1,952p, and giving it a price-to-earnings ratio of 25. Should the current speed of economic reopening continue, I will be more confident to invest in Coca-Cola HBC as the risk of re-closure reduces.

GlaxoSmithKline

As far as ethical investing goes, you probably weren’t thinking of one of the FTSE 100’s top pharma stocks. However, GlaxoSmithKline has proven to be an ESG leader thanks to its work in providing access to medicine. 

The pharma giant, whom activist firm Elliot Management recently took a large stake in, is ranked highest in the Access to Medicine Index. This index measures Big Pharma’s efforts to make its products available to more vulnerable populations. What’s more, this top British firm has promised to have a net-zero environmental impact by 2030. 

And although GlaxoSmithKline missed out on 2020’s pharma rally, I believe it could be on the up. New pharmaceutical sales rose 12% to £2.5bn in Q3, accounting for 30% of all revenue. It also remained very profitable, with an operating margin of 22%. It is the sixth-largest pharma company in the world with a strong brand and dedicated workforce.

Unfortunately, its planned corporate restructuring and dividend reduction could spell volatility for its share price. By reducing its dividend for the first time in 15 years and welcoming a heavy-hitter such as Elliot Management on board, it could be too much, too fast. 

GlaxoSmithKline is currently priced at 1,333p, down 20% in the past year from a price of 1,668p, and giving it a P/E ratio of 13. As it is still well off its all-time highs, I would be interested in it as a long-term dividend payer. 

Is this little-known company the next ‘Monster’ IPO?

Right now, this ‘screaming BUY’ stock is trading at a steep discount from its IPO price, but it looks like the sky is the limit in the years ahead.

Because this North American company is the clear leader in its field which is estimated to be worth US$261 BILLION by 2025.

The Motley Fool UK analyst team has just published a comprehensive report that shows you exactly why we believe it has so much upside potential.

But I warn you, you’ll need to act quickly, given how fast this ‘Monster IPO’ is already moving.

Click here to see how you can get a copy of this report for yourself today

Jamie Adams holds no position in stocks mentioned above. The Motley Fool UK has recommended GlaxoSmithKline. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Should you invest the value of your investment may rise or fall and your Capital is at Risk. Before investing your individual circumstances should be considered, so you should consider taking independent financial advice.

More on Investing Articles

Smiling senior white man talking through telephone while using laptop at desk.
Investing Articles

£10,000 invested in BT shares 10 years ago is now worth this much

It's painful to remember that BT shares reached over £10 at the peak of the dot com bubble in 1999.…

Read more »

Close-up Of A Piggybank With Eyeglasses And Calculator On Desk
Investing Articles

Is now the time to buy bank shares?

Our writer considers whether bank shares could be a bargain buy for his portfolio right now -- or a potential…

Read more »

Happy young female stock-picker in a cafe
Investing Articles

After steep falls, are Royal Mail shares a steal?

Royal Mail shares have more than halved since peaking a year ago. After months of steep falls, this popular stock…

Read more »

Young Woman Drives Car With Dog in Back Seat
Investing Articles

Dirt-cheap, 1 of my best stocks to buy also pays an above-average dividend!

This Fool has decided to buy the shares on his best stocks to buy now list with the shares looking…

Read more »

Light bulb with growing tree.
Investing Articles

The AFC share price just tanked! Is now the time to buy?

The AFC share price fell nearly 10% on Wednesday after the H1 revenue announcement. So, should I add this stock…

Read more »

A pastel colored growing graph with rising rocket.
Investing Articles

These shares have been growing dividends for decades. I’d buy!

Our writer considers the merits for his portfolio of buying two shares with a track record of growing dividends.

Read more »

Close-up of British bank notes
Investing Articles

Is the M&G dividend yield heading to 10%?

As the M&G dividend yield heads towards double digits, out writer explains why he is considering buying more of the…

Read more »

man in shirt using computer and smiling while working in the office
Investing Articles

3 top dividend shares to buy now

With weakness in the markets, I reckon it's a good time to search for top dividend shares to buy now.

Read more »