Halal stocks are attracting a new wave of investors, as ESG investing continues to grow in popularity.
Young millennial investors are beginning to prioritize a company’s social, environmental and religious principles to drive their investment decisions.
According to Refinitiv, the global Islamic finance industry is expected to grow to $5.9 trillion by 2026, up from just $4 trillion in 2021 (Refinitiv, 2022).
That is significant growth to be overlooked, which may be a huge benefit for shariah-compliant investors alike.
While ESG investing has faced large criticism in recent years, investors should not overlook its potential and how it overlaps with halal investment opportunities.
Below, we will present the 5 Best Halal Stocks to Buy in 2023!
5 Best Halal Stocks to Buy for 2023
1. Microsoft Corporation (NASDAQ: MSFT)
- Ticker: MSFT
- Dividend Yield: 0.89%
- Market Cap: $2.27 Trillion
Microsoft Corporation (MSFT) is a technology company and considered a halal investment option due to its strong financial performance and adherence to Islamic principles.
The company has a market capitalization of over $2 trillion and offers a range of products and services, including software, hardware, and cloud computing.
Microsoft has also made efforts to promote diversity and inclusion in its workforce, which aligns with Islamic values.
As of 2023, Microsoft is one of the top halal stocks to invest in for long-term growth potential.
2. Procter & Gamble Co (NYSE: PG)
- Ticker: PG
- Dividend Yield: 2.41%
- Market Cap: $369.03 Billion
Procter & Gamble Co (PG) is a consumer goods company that is considered a halal investment option due to its adherence to Islamic principles.
The company has a market capitalization of over $350 billion and offers a range of products, including personal care, home care, and health care.
Procter & Gamble Co has also made efforts to promote sustainability and ethical practices in its operations, which aligns with Islamic values.
3. Johnson & Johnson (NYSE: JNJ)
- Ticker: JNJ
- Dividend Yield: 2.91%
- Market Cap: $510.40 Billion
Johnson & Johnson (JNJ) is a multinational corporation that operates in the healthcare industry.
The company is considered a halal investment option due to its adherence to Islamic principles, such as avoiding investments in companies that deal with alcohol, tobacco, and gambling.
Johnson & Johnson has a market capitalization of over $500 billion and offers a range of products, including pharmaceuticals, medical devices, and consumer health products.
The company has a strong track record of growth and stability, making it a top halal stock to invest in for long-term investors.
4. Visa (NYSE: V)
- Ticker: V
- Dividend Yield: 0.77%
- Market Cap: $486.96 Billion
Visa Inc (V) is a global payments technology company that operates in over 200 countries and territories.
They are a halal investment option due to its adherence to Islamic principles, such as avoiding investments in companies that deal with alcohol, tobacco, and gambling.
Visa has a market capitalization of nearly $500 billion and has consistently delivered strong financial performance over the last decade.
With the increasing shift towards digital payments, Visa is well-positioned for long-term growth, making it a top halal stock to invest in.
5. Intel Corporation (NASDAQ: INTC)
- Ticker: INTC
- Dividend Yield: 1.61%
- Market Cap: $126.38 Billion
Intel Corporation (INTC) is a leading technology company that designs and manufactures microprocessors and other computer components.
They are a halal investment option due to its adherence to Islamic principles, such as avoiding investments in companies that deal with alcohol, tobacco, and gambling.
Intel has a market capitalization of over $100 billion and has consistently delivered strong financial performance.
With the increasing demand for technology and the growth of the digital economy, Intel is well-positioned for long-term growth, making it a top halal stock to invest in.
What is Sharia Compliant Investing?
Sharia-compliant investing is an investment strategy that considers the conditions of sharia law and governing religious Islamic principles.
Sharia-compliance and halal investing can often coincide with ESG investing, due to its social, environmental and governance implications.
Below, we will share the considerations that sharia-compliant investors monitor when approaching halal investing.
- Alcohol
- Gambling
- Tobacco
- Marijuana
- Pork products and non-halal foods
- Firearms
- Adult Entertainment
- Excess debt
Why Companies Actions Speak Louder Than Words
For Muslim investors, investing in halal stocks is important as it ensures that their investments are in line with their religious beliefs.
However, it can be challenging to identify companies that are not involved in haram practices.
It is important for Muslim investors to do their research and seek guidance from experts to ensure that their investments are halal.
Investing in halal stocks may seem like a morally sound decision, but it’s important to do your research.
While these companies may market themselves as ethical, it’s important to look beyond the surface and investigate their actual practices.
Halal stocks refer to stocks of companies that operate in accordance with Islamic principles and values.
This means that they avoid practices such as charging or paying interest (riba) and investing in industries that are considered haram (forbidden) such as alcohol, gambling, and pork products.
It is important for halal investors to look for any revenue generated from non-shariah compliant investments, as this may not align with your ethical and religious beliefs.
By investing in halal stocks, you can ensure that your investments are in line with Islamic principles.
Frequently Asked Questions (FAQs)
What is halal investing?
Halal investing is an investment strategy that considers the conditions of sharia law and governing religious Islamic principles.
Is Apple a halal stock?
Apple is largely considered a halal stock, although some of its investments come from non-halal sources. Investors should do further investigations to see if Apple aligns with their religious beliefs.
Is Nike a halal stock?
According to Mussafa, Nike is considered a halal stock. However, they do derive between 5-10% of their revenue from non-halal sources.
Disclosure: The author holds no position mentioned in this article. Freedom Stocks has a disclosure policy.
