Moral Investing?

When visiting friends and acquaintances, some topics are generally held as taboo for discussion with financial status, politics and religion usually top of the list.  It’s not due to political correctness but more along the lines of common courtesy.  Unless invited, why would I discuss the success I’ve enjoyed with someone who’s filed for multiple bankruptcies?

There are investors that choose to invest in faith based, moral or social causes that fit their beliefs.  Some choose to avoid tobacco, liquor, coal or oil issues in their portfolios for personal reasons.  Others have no issues or concerns whatsoever.  I believe Lawrence Meyers presents this view nicely in The Myth of Socially Responsible Investing.

All this is a long-winded introduction as one of my more recent purchases, Coca-Cola Bottling Co. Consolidated (COKE).  I noticed a footnote to a press release:

Our Purpose is to honor God, serve others, pursue excellence and grow profitably.

Now this is an unusual comment as generally companies shy away from public religious declarations.  There have been some exceptions, Chickfil-A (gay controversy) and Hobby Lobby (Affordable Care Act) but these companies are privately held.  Taking a deeper look at COKE’s stance, we find they have a Christian preference as one of the causes supported is Open Eyes which supports “evangelizing and growing the ministry of Jesus Christ” in addition to the “servant-leader” concept.

This not too surprising for a company headquartered in Charlotte, North Carolina made famous for Billy Graham and infamous for a bathroom bill (House Bill 2 NC), but it got me thinking once again.  If the company were operating as an Executive Order it would be deemed unconstitutional (Aziz v. Trump, 17-cv-116, U.S. District Court, Eastern District of Virginia (Alexandria).  As a company, COKE is held to a different standard.  With the non-Christian population of their geographic territory hovering at about 3% per the American Values Atlas, there have been no concerted calls for a product boycott.  In fact their products are kosher and halal.  Coupled with their community involvement my first test is met.

The next assessment is shareholder friendliness.  With no history of dividend increases, KO ownership of 34.8% (5% voting) and CEO/family control (86%) the only real hope a regular shareholder has is through beneficence.  This failure could be offset to a degree by growth (territory expansion).

I finally wanted to understand the rationale behind the corporate religious leanings and found a heartwarming article regarding the CEO’s son.  Being generally cautious of mixing corporate and religious activities, I did make an exception in this case as my underlying 2017 investing strategy is reliant on this holding as well as other Coca-Cola anchor bottlers.

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2 thoughts on “Moral Investing?

  1. That is strange to see such a religious statement made in an official document, everything is so PC now that I thought this would have been removed by now. Shame

    Liked by 1 person

  2. Well I did try to present a balanced picture 🙂 You’re right though … I would surmise that it is a non-issue since the company is so closely held. The surprise in my book is KO being complicit in COKE’s expansion.

    Like

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