Building a Sustainable Portfolio: 3 ESG Stocks to Buy and Hold

Stocks to buy

At first, the idea of environmental, social and governance or ESG stocks to buy and hold doesn’t seem particularly lucrative. Generally, an understanding exists that people don’t become wildly successful because they’re truly philanthropic. So, the same applies to big corporations, right?

Well, when it comes to sustainable stocks, it’s a nuanced picture. Of course, the profitability motive comes in front and center for all capitalist institutions. That’s just a hard reality and yes, some enterprises feel the temptation to cut corners. At the same time, shifting ideologies and sensibilities require businesses to get with the times.

As New York University mentioned, Americans have become more liberal than when compared to 50 years ago. To be sure, that’s not always reflected at the ballot box. And the adoption of progressive values doesn’t mean that conservative principles no longer appeal to anyone. Rather, certain understandings rise to the forefront and societies adapt to this new knowledge.

Therefore, it behooves enterprises to consider getting on the right path. Below are three ESG stocks to buy and hold for the long haul.

Iron Mountain (IRM)

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An enterprise information management services firm, Iron Mountain (NYSE:IRM) focuses on records management and data backup and recovery services. At first glance, the company’s acumen in both physical and digital storage solutions might seem a bit odd. However, amid the rise of cybersecurity threats, a digital breach can potentially derail a multibillion-dollar entity. Thus, protection has never been more important.

In addition, Iron Mountain ranks among the ESG stocks to buy and hold. According to Investor’s Business Daily, IRM ranks as number 50 on its list of 100 best ESG companies of 2023. In particular, the information management specialist seeks to achieve net-zero emissions by 2040. Also, it will continue to have 100% of purchased electricity for data center operations come from renewable sources.

As an added bonus, the company prints a three-year revenue growth rate of 5.6%, beating out nearly 72% of its peers. However, it still trades at a lowly 3.26x trailing-year revenue multiple, making IRM one of the discounted sustainable stocks.

Analysts rate shares a unanimous strong buy with a $67.20 price target.

Intuit (INTU)

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Nobody likes tax season which is why many folks love Intuit (NASDAQ:INTU). Of course, we’d all love to live in a world where doing one’s taxes only takes 30 minutes tops – yeah, I know, you’d like to have what I’m drinking right now. Unfortunately, we live in the real world. At the very least, though, Intuit can mitigate our pain through tax-related financial software.

And it turns out, people appreciate Intuit for another reason: it’s one of the ESG stocks to buy and hold. Per IBD, the software specialist places as number 58 on the top 100 conscientious companies for this year. Not surprisingly given its efforts to provide financial services, Intuit focuses heavily on corporate responsibility. In part, this means fostering diversity, equity and inclusion.

On the hard print, INTU does carry a lofty earnings premium. However, for the price, you get a consistently profitable enterprise that’s impressively expanding its top line.

Lastly, analysts peg INTU as a strong buy with a $580.41 price target.

Clean Harbors (CLH)

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A provider of environmental and industrial services, Clean Harbors (NYSE:CLH) makes for an intuitive case for sustainable stocks to buy. Notably, shares have soared robustly higher since the beginning of this year. Per its public profile, Clean Harbors focuses on myriad services, including hazardous waste disposal for companies, small waste generators, and government agencies.

While it’s easy to focus on the front-facing components of economic growth, all endeavors lead to waste byproducts. Someone has to clean it up, which makes CLH incredibly (and arguably permanently) relevant. To be sure, Clean Harbors slots in the number 39 spot on IBD’s top 100 conscientious companies.

Aside from its core business, the company strives to implement sustainable practices. As well, management focuses on diversity and inclusion protocols, giving voice and opportunities to underserved communities. Financially, CLH benefits from an impressive 16% three-year revenue growth rate combined with a better-than-sector-average net margin of 7.6%.

Finally, analysts rate CLH a consensus moderate buy with an average price target of $186.57.

On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. Tweet him at @EnomotoMedia.

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