Socially
Aware Investing Option
Because a
company's values largely define its corporate
behavior, insight into a company's management
process can help us predict its future
performance.
For example, it is widely
understood that a company deeply committed to its
employees is more likely to experience high
levels of productivity. Likewise, a company with
a real sense of responsibility to its customers
will have a loyal, growing market for its
products and services. And companies that respect
the environment are liable to avoid
dividend-slashing lawsuits. And so on. Regardless
of the precise nature of its business, a
corporation that demonstrates a sense of
responsibility or stewardship in these and other
areas possesses a critical advantage that can
result in high performance over extended periods
of time.
Viewing corporations through
this window of social awareness reveals vital
information about their inner workings--
information that can affect your investment in
critical ways.
VNB/FSNH's Socially
Aware Investing Option
Our SAI strategy does not
merely screen out potential investments. It is
designed to include all available information
about a company and its management in order to
provide a powerful composite profile.
With information this complete,
you can always make informed choices that meet
your needs. If you have established your own
investment criteria, so much the better. We can
contribute even more. Either way, our officers
will work with you to shape your investment
program, and will assist with as much of the
decision-making as you wish.
When you invest in a company,
you invest in that company's managers and in
their stewardship. It is vital to know their
values. In this day and age, you need a window on
stewardship before it is reflected in the final
results. Our SAI strategy presents this
information clearly, and in perspective. Here's
how:
1. The social criteria are
established.
2. The investment manager
reviews financial information concerning the
securities to be held, purchased, or sold.
| COMPANY COMMENT (updated
11/16/96) |
Attractively Priced (B)
|
| Food |
Cusip 370334104
|
XYZ
Corp.
|
164.5
million shares outstanding
|
| Price
|
$67
|
| 52-Week
Price Range |
$76-59
|
| Five-Year
Price Range |
$76-59
|
| S&P
500 |
419
|
| Dividend
|
$1.68
|
| Yield
|
2.5%
|
| Five-Year
Growth (annual) |
18.8%
|
| ROE
|
36.9%
|
| Five-Year
Average ROE |
42.3%
|
| Debt/Capitalization
|
40.2%
|
| Five-Year
EPS Growth (projected) |
14.0%
|
| |
1996
|
1997E
|
1998E
|
1999P
|
| EPS (May) |
$3.05 |
$3.45 |
$3.90 |
$5.07 |
| P/E |
19.2x |
19.3x |
17.1x |
13.2x |
| Rel. P/E |
1.09 |
1.11 |
1.08 |
1.07 |
| Five-Year Rel. P/E Range
|
1.26-0.80 |
|
|
|
|
3. The manager shares
with the investor the social criteria furnished
by Kinder, Lydenburg, Domini, & Co., Inc.
4. The manager and the investor
collaborate in the final design of the portfolio,
and together consider a refinement of future
social criteria.
XYZ
Corp.
|
| |
COMMUNITY
|
EMPLOYEE
RELATIONS
|
ENVIRONMENT
|
PRODUCT
|
| Concern
|
O
|
O
|
O
|
O
|
| Strength
|
XX
|
XX
|
O
|
O
|
| |
|
|
|
|
| |
WOMEN/
MINORITIES |
OTHER |
MILITARY
CONTRACTS |
NUCLEAR
POWER |
| Concern |
O
|
O
|
O
|
O
|
| Strength |
XX
|
O
|
O
|
O
|
| No Concern/No Strength =
O |
Concern/Strength =
X
|
Major Concern/Major
Strength = XX
|
BUSINESS
XYZ Corp.'s primary
business is packaged food. It has
operations throughout the U.S. and
Canada, as well as in Europe, Japan and
Korea.
COMMUNITY
In 1996 the company
donated 2.2% (10.5 million) to charity,
the largest cash giving program in XYZ
Corp's Industry classification. The
company's foundation funds numerous
innovative projects, including an unusual
effort to develop home-based alternatives
to nursing-home care for the elderly. Its
support for volunteerism includes a
program at corporate headquarters that
links the skills of employees and
retirees with the needs of community
groups.
EMPLOYEE RELATIONS
The company is one of
only four in XYZ Corp's industry
classification to receive our highest
rating for retirement benefits. These
include: a defined benefit pension plan,
a 401 (k) plan with a company match in
excess of 3%, postretirement healthcare,
and an Employee Stock Ownership Plan.
The firm has established
worker involvement programs at some
facilities. Two plants have adopted a
production team organization, under which
worker groups make most day-to-day
management decisions. One has started a
pilot program which increases employee
involvement by allowing workers to
participate in the interview and hiring
process, handle disciplinary problems,
and establish their own work schedules.
XYZ Corp. has recently
extended a variety of stock ownership
programs to middle level managers. The
company's profit sharing plan extends to
salaried employees.
|
Interested?
Have questions? You can drop by one of our offices, call us at 1-800-334-6862, or contact
us by e-mail.
|
