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First off, relax! I'm not going to get all mushy on you, because that's just not my style. I've cried enough that I don't have any emotions left other than sarcasm -- that's what comes with being a Detroit Lions fan my entire life.
However, when it comes to investing, it pays to note where people's compassions lie, because love will usually outweigh all other emotions (and occasionally your better judgment). I know that may sound horribly cliche, but think about what you wouldn't do for your family, your friends, your pets, or members of your community to make them be happy, feel good, or live longer. Despite those rare cases you see profiled on America's Most Wanted, the majority of us are good-hearted people striving to make a difference not only in our own lives, but in the lives of those around us.
It's for this reason that I propose we look at five companies today that lead with their hearts and leave the health of their business up to the compassion of others.
Whole Foods Market and Kroger
What? A pair of grocery stores that lead with their hearts? You're probably rolling your eyes and thinking about how you had to pay an extra $0.45 for that gallon of milk this week and cursing that grocery store for every extra cent they took. But let's look at this from a completely different angle...
Did you know that Kroger (NYSE: KR ) gives an average of $14 million per month to various charities according to its website, making it the only publicly traded company to contribute more than 10% of its profits to charity in 2010? It's also on pace to top $1 billion in cumulative charitable contributions within just a six-year period at this pace. Kroger gives back to its local communities through food donations and drives as well as charitable donations to military families, and recently began allowing the Salvation Army to put its kettles outside its doors around Christmastime. It builds its business around first building up its community.
The same thing can be said for Whole Foods (Nasdaq: WFM ) , which exudes love for both its employees and its community. Whole Foods' benefits package and pay scale are practically unmatched when it comes to fairness, and the products it carries, while pricier than what you might find in your standard grocery store, are geared toward providing customers with more nutritious organic and natural foods. It takes a lot to assume that with unemployment at 8.3% and consumers already strapped for cash, people would continue to pony up extra money for more nutritious foods, but that's exactly what's happened. Whole Foods' commitment to providing better food for its community is yet another example of its love for its customers.
As a pet owner, let me tell you that there's little I wouldn't do or pay to ensure the health of my pets. According to the American Pet Products Association, 62% of all households (or 72.9 million) currently own a pet -- and that trend has only been on the rise. If you do own a pet, I encourage you to look around your home and note just how many different pet toys, treats, foods, and beds are laying around. My guess is that it'll be quite a lot.
Our pets have made the transition over the past couple of decades from just being pets to being "part of the family," and PetSmart (Nasdaq: PETM ) is a major player in assisting this transition. Rather than prey on consumers' weakness for their pets, PetSmart has assisted in the adoption of more than 5 million previously homeless pets since 1994. But it doesn't stop there; PetSmart also returns an average of $4 million annually in grants to aid in the adoption of pets. Let's not forget that PetSmart also carries a diverse selection of pet products that does include all-natural and organic options. It really is providing what we as owners need to keep our pets happy and healthy, and it's doing so in a genuinely caring manner.
Merck and Pfizer
I may rip into big pharmaceutical companies all the time due to their never-ending battle against patent expirations, but if there's one thing that cannot be questioned with regard to Merck (NYSE: MRK ) and Pfizer (NYSE: PFE ) , it's that they are in the business of saving lives and keeping your loved ones healthy.
Pfizer's cash donations of $56.4 million in 2011 might cause some resentment among consumers given that it brought in $12.8 billion in pre-tax income. Looking at the bigger picture, though, Pfizer was the largest product donator of any publicly traded company, giving away $3 billion (yes, with a "b") in drugs and other products to help fight disease around the world. I dare you to plug "Pfizer donates" into Google search -- you will get more than 1 million results, describing multiple different drugs of varying costs being donated to countries worldwide. Pfizer is clearly making enough to pay its bills, but it's also making a valiant attempt to help those less fortunate who can't afford its life-saving medications.
Merck also shares this mission, handing over close to $1.3 billion in cash and products last year. Like Pfizer, its donated cash amount of $72.6 million was just shy of 1% of total pre-tax income, but through its Merck Medical Outreach Program and U.S. Patient Assistance Program, the company is both providing the treatments needed by the less fortunate and helping get those treatments to their destinations.
It all starts with compassion
Over the years, we've heard countless ways to evaluate the merits of a company, from the quality of its earnings to the trend of the industry to even the tenure of management. While all of these are meaningful, they fail to factor in a company's compassion and the people striving to make a difference in the lives of others.
Some say love is a beautiful thing -- I say it may be powerful enough that you might actually be able to bank on it!
What do you think? Is a compassionate company important to your investing strategy? Share your thoughts with your fellow Fools in the comments section below.
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