As a believer in Christ, I often question how my spiritual beliefs should influence my investing decisions. Even though I fall short of who He’s called me to be daily, I still want to honor Christ in all I do. And that includes investing.
Should I own stock in companies whose morals don’t align with my biblical beliefs? Should I invest in companies that advocate, donate, and openly support movements that are in direct opposition to His truth?
These are questions I struggle to answer, but they got me thinking. What publicly traded companies, trading on major stock exchanges today, were founded by Christian believers? Might there still be some Christianity embedded in their DNA?
In this article, I’ll profile 3 companies, founded on Christian principles, whose stock you can purchase today.
About This Post
Before jumping in, there are two things I want to establish.
First, this article will focus solely on each company’s founder. It’s NOT a list of companies I believe to be guided by Christian principles today. It’s up to the reader to determine whether these companies still operate under biblical principles. And to determine if Christ sits at the center of the boardroom.
Second, I’ll provide an opinion on 1) if I believe the company to be high quality (my definition here), and 2) if I believe its stock will underperform, outperform, or perform in-line with the S&P 500 over the next 5 years. Here are some of the tools I use.
These responses are my own opinion and not investment advice. They’re also not a conclusion that these companies are still rooted in Christianity.
1) The Hershey Company (HSY)
Founder: Milton S. Hershey
If you’ve ever sat around a campfire eating s’mores, or seen the 1993 classic “The Sandlot,” you’ve probably heard of The Hershey Company. Hershey’s, the famous chocolatier and inventor of the Kiss, trades on the NYSE under the ticker HSY.
The Hershey Company was founded in 1894 by Milton S. Hershey. Hershey was raised in a Mennonite family which instilled in him strong Christian principles. Throughout his life, he remained committed to his faith and saw it as a guiding force in his actions and decisions.
One of Hershey’s lasting contributions is the Milton Hershey School which was established in 1909. The Milton Hershey School, located in Hershey, Pennsylvania, is a private boarding school for underprivileged children.
HSY Stock Profile
HSY is a high quality business. Over the past 10 years, HSY’s return on invested capital (ROIC) has averaged 20% which is exceptional. The company has a sound balance sheet, buys back stock, and pays a dividend near $4.15 per share.
However, I don’t think HSY offers market-beating potential. Because over the same 10 year period, revenue has only compounded at 5% while free cashflow flow (FCF) is slightly better at 8%. I view HSY as a stalwart, and expect it to perform in-line with the S&P 500 over the long term. It’s not a bad choice for dividend income though.
2) Colgate-Palmolive Company (CL)
Founder: William Colgate
When you think of the Colgate-Palmolive Company, ticker CL on the NYSE, you probably think of toothpaste. Colgate-Palmolive is a global leader in oral care, personal care, and household products with a long history dating back to 1806.
William Colgate, the founder of Colgate-Palmolive Company, was a devout Baptist. He started his business journey in 1806 with a small soap and candle shop in New York City. Throughout his career, he remained steadfast in his faith and sought to align business practices with his Christian beliefs.
Colgate believed in the importance of giving back. Most notably, he helped establish the Colgate Memorial Chapel at Colgate University, which stands as a testament to his faith and philanthropic legacy.
CL Stock Profile
Similar to HSY, CL is also a high quality business with ROIC averaging 28% over the past 10 years. Very impressive. But CL’s revenue has gone nowhere over the same time period while FCF fared slightly worse, decreasing 3% per year.
On a positive note, CL pays a dividend near $2.00 per share and buys back stock. But I don’t think it offers market-beating potential. In fact, it wouldn’t surprise me to see Colgate-Palmolive underperform the market over the long-term.
3) Domino’s Pizza (DPZ)
Founder: Tom Monaghan
Domino’s Pizza, stock ticker DPZ, is a fast-casual pizza chain known worldwide. Its founder, Tom Monaghan, is a devout Catholic who sold his majority stake in the company for $1 billion in 1998.
As a Catholic, Monaghan has been a generous supporter of various Catholic causes and institutions. He’s made significant contributions to Catholic education and established Ave Maria University, a private Catholic university located in Ave Maria, Florida. Founded in 2003, the university is known for integrating Catholic teachings and values into its academic programs.
DPZ Stock Profile
I’m more bullish on DPZ than I am HSY or CL. Domino’s is a unique, high quality business that operates a franchise model worldwide. Its capital-light model generates a lot of FCF with ROIC averaging 58% over the past 10 years. DPZ pays a dividend and buys back a lot of stock.
My only knock against DPZ is that it carries a fair amount of debt. In the past, Domino’s has borrowed money to buy back shares of its own stock. This has bolstered earnings per share (EPS) growth, which averaged 21% over the same 10 year period. Taking on debt to buy back stock isn’t my favored approach to creating shareholder value.
Nonetheless, I believe DPZ will outperform the market over the next 5 years. This is partly due to DPZ’s current share price which is considerably off it’s 52 week high.
Wrapping Up
The Hershey Company (HSY), Colgate-Palmolive (CL), and Domino’s Pizza (DPZ), though drastically different businesses, do have a couple things in common.
- Each was founded by a professing Christ-follower
- Each is a high quality business generating millions in profits for shareholders each year
Personally, I prefer them in this order: DPZ, HSY, and CL. But that’s based on my own biases, research, and preferences. Honestly, I think you’d be okay owning all three.
With a biblical-based founding, it’s possible these companies still have Christ embedded in their DNA. Or at least have not strayed so far away from Truth that they convict a Christian investor’s heart by owning it.
This article isn’t a conclusion one way or the other. I recommend each investor perform their own research and develop their own conclusions. Only you’ll be able to determine if Christ still sits in the boardroom.
