On National Pet Day, here are 7 investments that prioritize animal welfare

Thursday is National Pet Day in the United States. In addition to the added attention the day focuses on our four-legged companions, it’s a good time to note the increasing interest in bringing animal welfare into a more prominent role in impact investing.

An analyst team at AskTraders, a London-based financial services platform, decided to delve into animal welfare, recognizing that cruelty-free investing was becoming a hot topic among its online community.

Here are seven investments that these analysts say you should consider if animal welfare is one of your impact investing criteria. They complied the recommendations after incorporating the guidance offered by the nonprofit organization Cruelty Free Investing and the Caring Consumer Database operated by PETA.

Beyond Meat

Probably the most obvious choice in this analysis, Beyond Meat BYND is a Los Angeles–based producer of plant-based meat substitutes. Founded in 2009 by Ethan Brown, the company’s initial products were launched in the United States in 2012. The company went public in 2019, becoming the first plant-based meat company to go public.

The stock jump from its IPO price of $25 a share to trade above $222 that first year, But the euphoria wore off soon after: The stock today trades near $7.

“Some of the early-stage projections for growth were overinflated, and traditional valuation models always deflate stock market bubbles in the end. The price drop also ties in with other cruelty-free stocks coming to the market and offering alternative options for those looking to invest in the sector, the analyst team wrote.

But they point out that Beyond Meat is still a standard bearer for the cruelty-free sector, and many will be considering buying in at levels where it can be argued to be undervalued.

Microsoft Corp.

Perhaps the least intuitive pick on the list, Microsoft MSFT is not involved in any activities that harm or exploit animals. AskTraders noted the company is working to preserve the planet for all its inhabitants, animals and humans. It aims to be carbon negative by the end of this decade by cutting emissions, and is also removing its historical carbon emissions by 2050.

“Microsoft is not a vegan trailblazer in the sense that Beyond Meat is, but it illustrates how wide the spectrum of ethical investing extends.,” the team said. “If you’re looking for a cruelty-free stock that is also a sensible investment option, then market giant Microsoft fits the bill.

The stock is up about 70% over the last three years and remains near an all-time high at $425.

Ingredion Inc.

Ingredion INGR provides plant-based ingredients for food, beverages, pharmaceuticals and beauty products. It makes the cruelty-free investing list of companies that don’t exploit animals and the Ethisphere list of the world’s most ethical companies – scoring high on many criteria such as diversity and inclusion and transparency, as well as animal welfare.

The company also aims to help customers replace synthetic ingredients with naturally derived solutions and makes its plastic packaging more biodegradable and earth-friendly.

“The share price of INGR is at the same time relatively stable, which makes it a good pick for beginners looking to gain exposure to the sector, rather than a speculation-based, roller-coaster ride,” AskTraders said.

The stock has hung around the $100 level over the last three years and is just below its recent high. In addition to the relative stability of its stock price, the company has paid a steady dividend over the year, with a current yield of 2.8%

Colgate-Palmolive

The AskTraders analysts admit that Colgate-Palmolive CL falls into a ‘gray area’ on the animal welfare front. While the company has since 1999 maintained a voluntary moratorium on animal testing of its adult personal-care products, certain of its products must by law meeting testing protocols that do involve animals.

So it doesn’t make PETA’s list of companies that do not test on animals, but it is included in that group’s list of companies working for regulatory change.

“Some credit goes to Colgate-Palmolive for actively working for the replacement of animals with non-animal methods, and for also releasing to PETA all information about tests and what it has done to avoid them,” the analysts said.

The stock is part of a staid group of consumer staples companies that are considered defensive plays for the most part by Wall Street. The stock is up just under 8 percent in the last three years. It’s dividend yield is 2.3%.

Accenture PLC

The global professional-services company is on the cruelty-free investing list of safe investment companies. Accenture ACN does well on other ESG criteria, such as equality, environmental impact and good governance, and is one of the world’s most ethical companies, according to Ethisphere.

“Accenture isn’t an exciting hyper-growth stock, but has a role to play as part of a well-diversified cruelty-free portfolio. By helping to smooth out overall returns, it can act as a counterweight to more volatile stocks, and allow investors to stay in high beta positions during periods of market uncertainty,” the team said.

The stock is up about 15% over the last three years, but well off its high over $400 at the start of 2022. Its dividend yield is 1.6%.

Oatly Group

Oatly OTLY seems a controversial pick, given prior questions over the company’s business practices and its reliance on a $200 million stock sales to Blackstone Group, which has been under fire for other investments that are not ESG aligned.

But the Swedish-based producer of alternatives to dairy products that grew out of research labs at the world-renowned Lund University has been successful, growing to be available in 60,000 retail stores and 32,200 coffee shops around the world.

“The ethical concerns surrounding Oatly represent significant growing pains, but the firm’s vegan credentials are beginning to look stronger,” the analysts said.

It’s stock is certainly not for everyone. At $1 a share, it is light years below its 3-year high of $26.

“However, the strong brand recognition makes the stock an interesting proposition for value investors with a long-term view and a desire to tap into the vegan sector,” AskTrader said.

U.S. Vegan Climate ETF

The US Vegan Climate ETF VEGN tracks the Beyond Investing U.S. Vegan Climate Index. That index screens large-cap U.S. companies using a variety of ESG criteria. It gives additional weighting to animal harm issues and animal exploitation, as well as fossil fuels, environmental damage and human rights.

“The total expense ratio of the VEGN ETF is 0.60%, which is in line with the industry average, so those who buy it are getting the additional screening of animal cruelty stocks at a cost-effective rate. It also comes with all the functionality advantages of ETFs and offers exposure to a wide range of cruelty-free companies in just one trade,” the analyst team noted.

The exchange traded fund is up about 20% in the last three years and is trading just below its 3-year high near $47. It pays a small dividend that yields 0.6%.

Read more: A conversation with the Calamos Sustainable Investing team