UBS found a surprising driver of stock market returns — and these 15 stocks could be set to benefit

A Costco worker arranges meat in a display at a Costco Warehouse store March, 2, 2006 in Richmond, California. Costco Wholesale Corporation, the nation's largest warehouse club operator, reported an 11 percent increase in quarterly sales, beating second quarter estimates.

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A Costco worker arranges meat in a display at a Costco Warehouse store March, 2, 2006 in Richmond, California. Costco Wholesale Corporation, the nation’s largest warehouse club operator, reported an 11 percent increase in quarterly sales, beating second quarter estimates.
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Justin Sullivan/Getty

  • In sectors that rely on human capital, employee satisfaction can be a big driver of company success.
  • Glassdoor ratings and company performance are well correlated, according to UBS.
  • The Swiss bank identified 15 companies that have high Glassdoor ratings that investors should consider.

Employee motivation may not be the first thing that comes to mind when considering which stocks will perform well. But according to UBS, it’s a key factor for certain companies that investors should be paying attention to.

“In sectors where human capital is a significant component of firm value, companies with relatively higher employee motivation have a competitive advantage which should result in improved financial statement quality and growth over the long term,” analyst Oliver Antrobus wrote in the note.

UBS looked at Glassdoor employee ratings of companies, and found a strong correlation between employee satisfaction and future financial results.

A UBS graph shows that companies with relatively high Glassdoor employee satisfaction scores yield excess returns relative to portfolios of retailing stocks. The reverse is true for companies with poor Glassdoor scores.

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UBS

A Glassdoor rating of 3 indicates that employee satisfaction is average. A rating of 5 shows the most satisfaction, and 1 the worst.

Here is UBS’ list of fifteen promising stocks of companies with high employee satisfaction:


Costco Wholesale Corporation

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Markets Insider

Glassdoor Score: 3.85

Sector: Retailing

Ticker: COST-US

Rating: Buy


Home Depot, Inc.

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Markets Insider

Glassdoor Rating: 3.62

Sector: Retailing

Ticker: HD-US

Rating: Buy


TJX Companies Inc.

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Markets Insider

Glasdoor Rating: 3.54

Sector: Retailing

Ticker: TJX-US

Rating: Buy


Lowe’s Companies, Inc.

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Markets Insider

Glassdoor Rating: 3.46

Sector: Retailing

Ticker: Low-US

Rating: Buy


Adobe Systems Incorporated

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Markets Insider

Glassdoor Rating: 4.43

Sector: Tech

Ticker: ADBE-US

Rating: Buy


Salesforce.com, Inc.

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Markets Insider

Glassdoor Rating: 4.42

Sector: Tech

Ticker: CRM-US

Rating: Buy


NetApp, Inc.

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Markets Insider

Glassdoor Rating: 4.40

Sector: Tech

Ticker: NTAP-US

Rating: Buy


Microsoft Corporation

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Markets Insider

Glassdoor Rating: 4.20

Sector: Tech

Ticker: MSFT-US

Rating: Buy


Cisco Systems, Inc.

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Markets Insider

Glassdoor Rating: 4.17

Sector: Tech

Ticker: CSCO-US

Rating: Buy


Apple Inc.

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Markets Insider

Glassdoor Rating: 4.06

Sector: Tech

Ticker: AAPL-US

Rating: Buy


Expedia, Inc.

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Markets Insider

Glassdoor Rating: 4.01

Sector: Tech

Ticker: EXPE-US

Rating: Buy


Amazon.com, Inc.

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Markets Insider

Glassdoor Rating: 3.99

Sector: Tech

Ticker: AMZN-US

Rating: Buy


Intel Corporation

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Markets Insider

Glassdoor Rating: 3.98

Sector: Tech

Ticker: INTC-US

Rating: Buy


Yahoo Japan Corporation

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Markets Insider

Glassdoor Rating: 3.81

Sector: Tech

Ticker: 4689-JP

Rating: Buy


eBay Inc.

source
Markets Insider

Glassdoor Rating: 3.71

Sector: Tech

Ticker: EBAY-US

Rating: Buy