Three emerging markets stocks for sustainable growth
In emerging markets, the alignment of societal and environmental development with robust financial growth offers attractive investments.
In emerging markets, the alignment of societal and environmental development with robust financial growth offers attractive investments. Companies across diverse sectors, from electric vehicles to education and finance, are delivering valuable services while offering solid investment opportunities.
Three notable examples vividly highlight this encouraging trend.
1. Samsung SDI
The first is Samsung SDI (Seoul: 006400) in South Korea, a front-runner in the electric vehicle battery sector, reflecting a promising mixture of positive impact and financial growth.
The firm is a key beneficiary of the burgeoning demand for electric vehicles, propelling a vital global shift toward sustainable transportation. It is a battery supplier to key global carmakers such as BMW, Volkswagen, Audi and Volvo. The group’s estimated compound annual revenue growth rate between 2019 and 2024 is expected to be around 19%. Its superior technology and favourable valuation (the stock is on just nine times forward earnings before interest, taxes, depreciation and amortisation – Ebitda) relative to other leading battery manufacturers (such as LG Energy Solution at 16 times forward Ebitda) adds to its investment appeal.
MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Moreover, as the US strives to diminish its reliance on Chinese suppliers, South Korean ones such as Samsung SDI are likely to benefit both in terms of exports and also through new manufacturing capacity investments in the US, either independently or through joint ventures with carmakers.
2. Laureate Education
Moving to the education sector, Laureate Education (Nasdaq: LAUR) – while headquartered in the US – operates primarily in Mexico and Peru.
We believe private higher and vocational education have a role to play, primarily in emerging markets where limited public funds are best spent on primary education. Affordable higher and vocational education by private companies both play an important part in reducing income disparities and reducing the burden on public finances. Laureate is well-positioned to reap the benefits of US efforts to “nearshore” manufacturing.
The company’s prospective collaborations with corporations aim to bolster Mexico’s skilled workforce, aligning economic growth with societal advancement. Laureate’s solid free cash flow, robust balance sheet and attractive dividend yield of around 5% further underscore its investment appeal, all the while contributing to the vital task of developing education and skills in regions that crave educational advancement and an increasingly skilled workforce.
3. Shriram Finance
Shriram Finance (Mumbai: SHRIRAMFIN) is a compelling investment opportunity in India’s financial arena. Specialising in commercial-vehicle financing, the company facilitates economic activity by enabling essential vehicle acquisitions for small businesses, filling an important gap in the market where traditional banks have not been active.
Active for more than 40 years, Shriram Finance has established longstanding relationships with its clients. The company says that 70%–85% of the vehicles sold work either directly or indirectly in agriculture, most of them being used to transport food across the country. The firm generates a good return on equity (a key gauge of profitability) of 15%, and is one of the more attractively valued financial entities in India, trading on a price/earnings ratio of only 12 – stock valuations are generally high in India compared with other emerging markets.
This article was first published in MoneyWeek's magazine. Enjoy exclusive early access to news, opinion and analysis from our team of financial experts with a MoneyWeek subscription.
This material is not intended as an offer or invitation to purchase or sell any investment.
Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.

Eli Koen is a portfolio manager at Union Bancaire Privée (UBP) and co-manages the UBAM Positive Impact Emerging Equity fund. Based in London, Eli joined UBP in 2010. Previously, he was co-head of Emerging Europe Equities at Fortis Investments. Prior to fund management, Eli was a research analyst in emerging markets at Goldman Sachs and Lehman Brothers in London and Finansbank in Istanbul. He holds an MA in International Economics and Finance from Brandeis University, Waltham, MA and a BA in Economics from Bogazici University, Istanbul.
-
Is it time to ride the recovery in emerging markets?
Interview What's the outlook for emerging markets? Gustavo Medeiros, head of research at Ashmore Group, gives his analysis and reviews progress in developing economies
-
Could the Enterprise Investment Scheme cut your tax bill?
The Enterprise Investment Scheme is tax-efficient and potentially lucrative. Taking a chance on the scheme could trim your family’s IHT bill, says David Prosser
-
'Ride the recovery in emerging markets': Gustavo Medeiros of Ashmore Group tells MoneyWeek
Interview What's the outlook for emerging markets? Gustavo Medeiros, head of research at Ashmore Group, gives his analysis and reviews progress in developing economies
-
What is the Enterprise Investment Scheme and should you have one?
The Enterprise Investment Scheme is tax-efficient and potentially lucrative. Taking a chance on the scheme could trim your family’s IHT bill, says David Prosser
-
The alcohol industry is suffering as consumers sober up – is it still worth investing in the sector?
Changing consumer tastes are rocking the alcohol industry, but the best players are adapting their strategies. Buy them while their shares are still cheap
-
A strange calm in credit
Corporate bond markets remain remarkably relaxed, with yields that offer little compensation for risks
-
The City's big bet on green finance fails to pay out
Opinion Insurers and banks are backing away from “green finance”, and there is not much sign of the green boom we were promised. That’s a problem for the City
-
Six top investment trusts for smaller stocks
Liquidity constraints mean investment trusts are best placed to seize the juiciest opportunities
-
Why is English football thriving – and can it last?
What has gone so right for English football? The national team has found its feet; the Premier League is swimming in money and profits are soaring
-
Could colour diamonds add a sparkle to your portfolio?
Diamonds of various shades never go out of fashion, says Chris Carter