This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

5 Fatcat Corporations Trying To Pay Their Way To Profit

Stocks in this article: CMCSA DWA GS LVS T

Ever try and pay off a referee at a sporting event or maybe pay a friend to write a term paper for you?   I hope not. By the same logic, should corporations be able to use investor money to try and sway politics? Rightfully, most involved in the sustainable investing world don’t think it proper. (Related: The List of Best Places to Work Is A Solid Watch-List for Shareholders) 

One aspect of Environmental, Social and Governance (ESG) investing has to do with strong corporate governance. Issues under this Governance section include corporate transparency, executive compensation, general corporate decision making, and political spending. Corporate political spending entails donations to political parties, candidates and Political Action Committees (PACs) and is often frowned upon as investors have no idea where this money is being directed.

So how much money is being spent to sway our public officials?  In the midst of the 2012 election, almost $5 billion was spent by groups hoping to influence our congressional and presidential races. Most of this spending goes towards those non-stop commercials attacking the opposite party.

Many of the companies we invest in today are quietly taking money out of the petty cash drawer to change politics.  These are the 5 largest corporate contributors or “fatcats” for 2012:

5. Dreamworks Animation SKG Inc. (DWA) - $2,370,150

4. AT&T (T)  - $2,504,219

3. Comcast Corporation (CMCSA)  - $4,769,994

2. Goldman Sachs (GS) - $4,769,994

1. Las Vegas Sands Corp (LVS) - $11.738,600

Due to the funnelling of these dollars into these super PACs, trying to find where this money is being directed is the difficult part. For example, the main Obama super PAC, Priorities USA Action was given $1 million from Jeffrey Katzenberg, CEO of Dreamworks.  On the flip side, Las Vegas Sands Corp poured money into supporting the Republican Party and Mitt Romney's run for president.

For an investor, is this good or bad?

According to a Rice University/Long Island University studycompanies that spend heavily on campaigns, lobbying and other political contributions aren’t necessarily helping their own bottom line. This team looked at stock value of 943 companies in the S&P 1500 over 11 years and tracked approximately $5 billion in political spending from 1998 to 2008. Their findings showed that on average, a company that spent more on political interests, performed worse financially.

Below is the 1 year return of the top 5 political-contributing companies along with their CEO compensation.   List Average 1-Year Return: 16%.

Written by Kapitall's ESG  (Environmental, Social, Governance) Expert, Dale Wannen

null

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,686.25 +329.38 1.90%
S&P 500 2,050.44 +37.55 1.87%
NASDAQ 4,730.3260 +86.0140 1.85%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs