In the dynamic landscape of ethical investing, the allure of Sharia-compliant funds has transcended the boundaries of religious preferences. As we delve into the world of ethical finance, let's explore the ins and outs of Halal stocks, deciphering the criteria that make a stock Halal and unveiling the top picks for discerning investors.
Sharia Compliance Unveiled
Sharia-compliant funds, rooted in Islamic law, meticulously avoid activities prohibited by Islam. This includes steering clear of investments in institutions dealing with interest and excess debt, alcohol, pork-related products, gambling, adult entertainment, tobacco, marijuana, cloning, firearms, and defense.
Decoding Halal Stocks
Business Activity Screening
Before a stock is deemed Halal, a stringent screening process is in place. This involves ensuring a business's activities align with Sharia principles. Industries such as non-Islamic banking, finance, and insurance, alcohol, pork-related products, and others deemed non-compliant are instant exclusions.
Financial Ratio Screening
To further refine the selection, a meticulous review of financial ratios comes into play. The percentage of interest-bearing debt in relation to total assets must not exceed 33%. Additionally, interest-bearing securities and assets should be less than 30% of the trailing 36-month average market capitalization.
The Cream of the Halal Crop
Nvidia (NVDA)
Nvidia Corporation, with a market cap of $389.45 billion, stands at the forefront of PC graphics, GPU, and artificial intelligence. Despite a 52-week change of -43.82%, its Sharia Score of 5 underscores its resilience in the Halal realm.
Advanced Micro Devices (AMD)
With a market cap of $108.415 billion, Advanced Micro Devices, Inc. is a global semiconductor giant. Despite a -51.03% change in the past year, its Sharia Score of 5 solidifies its place in the Halal stocks list.
Adobe (ADBE)
Adobe Inc., boasting a market cap of $158.987 billion, focuses on software solutions. Despite a -35.46% change, its Sharia Score of 3 positions it as a noteworthy choice in the ethical investment sphere.
Johnson & Johnson (JNJ)
A healthcare behemoth with a market cap of $459.05 billion, Johnson & Johnson has weathered the market, showcasing a 2.53% positive change in the past year, coupled with a Sharia Score of 3.
Nike (NKE)
NIKE, Inc., with a market cap of $193.587 billion, strides into the Halal stocks arena with a Sharia Score of 4, despite a -16.93% 52-week change.
Zoom Inc (ZM)
Zoom Video Communications, Inc., with a market cap of $20.486 billion, embraces the video-first communication era. A Sharia Score of 4 positions it as a compelling choice, despite a -60.50% 52-week change.
Peloton Interactive (PTON)
Peloton Interactive, Inc., with a market cap of $3.173 billion, thrives in the interactive fitness domain. Despite a -75.60% 52-week change, its Sharia Score of 4 showcases its Halal credentials.
Lululemon (LULU)
Lululemon Athletica Inc., with a market cap of $38.084 billion, captivates the Halal stocks list with a Sharia Score of 5, despite a -13.87% 52-week change.
Visa (V)
Visa Inc., a payments technology giant with a market cap of $462.912 billion, boasts a Sharia Score of 4, despite a -1.97% 52-week change.
Tractor Supply Company (TSCO)
With a market cap of $24.023 billion, Tractor Supply Company exemplifies Halal choices, earning a Sharia Score of 5, despite a -3.68% 52-week change.
Abbott Labs (ABT)
Abbott Laboratories, with a market cap of $195.541 billion, emerges as a Halal contender with a Sharia Score of 4, despite a -17.35% 52-week change.
The TJX Companies (TJX)
The TJX Companies, Inc., with a market cap of $94.185 billion, concludes our Halal stocks list with a Sharia Score of 5, boasting a commendable 9.84% positive change in the past year.
How to Navigate the Halal Stocks Landscape with baraka
At baraka, we empower investors to seamlessly integrate Halal stocks into their portfolios through our Sharia filter. This allows investors to align their financial endeavors with their ethical beliefs without compromising performance.
Disclaimer: Sharia-screened stocks may involve additional risks and costs. The views on Sharia compliance may vary, and investors are encouraged to consult a Sharia advisor for personalized guidance. Past performance is not indicative of future results.
For a comprehensive Halal stocks experience, explore our platform at . Your journey to ethical investing begins here.
