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FORTUNE.COM// JA N.1 .19and remind employees to use vacation days
and parental leave.
The encouraging result of this research:
What’s good for employees appears to be good
for shareholders. Just’s top-ranked companies
overall have consistently outperformed the
Russell 1000 over the past several years. And
companies that scored in the top 50% on its
work/life balance metrics, for example, have
earned an average annual return on equity of
19.4% over the past five years, more than two
percentage points higher than those in the
bottom half. The explanation for that supe-
rior performance may come down to simple
human nature: A better-rewarded workforce
produces at higher levels, Whittaker explains.
Other groups are registering similar results;
the ESG-oriented firm Parnassus Invest-
ments, for example, has found that as a group,
the companies onFortune’s Best Companies
to Work For list consistently beat the market.
WITH THAT CORRELATION IN MIND,Fortune ex-
plored Just Capital’s most recent rankings to
find generous employers that also have prom-
ising outlooks for the years ahead.
Ultimate Software(ULTI, $251) specializes in
cloud-based human resources platforms, and
it brought in nearly $1 billion in revenue last
year. It’s known for paying Silicon Valley–
esque salaries to workers in the comparatively
affordable environs of its headquarters in
Weston, in South Florida. Ultimate also tops
Just’s lists for work/life balance and career
development, offering tuition reimbursement,
day-care services, and unlimited personal
time off.
On the business front, it’s Ultimate’s rev-
enue growth, which has hit 20% every year
since 2012, that investors find righteous. True,
the stock has fallen 24% from its summer
peak on concerns that software firms will take
a cyclical hit if the U.S. economy sputters.
But to sustain growth, Ultimate has looked
toward Europe, buying Paris-based PeopleDoc
for $300 million this year. With a price-to-
expected-2019-earnings ratio of 41, Ultimate
trades in line with other fast-growing software
companies. Needham analyst Scott Berg says
it actually deserves to trade at a premium
because of its consistent growth.
Online real estate platformZillow Group(ZG,
$35) is another top performer on the work/life
balance front, offering benefits like
16-week maternal and eight-week
paternal leave. A variety of factors
shaved 18% off its share price
this year. A tweak in how Zillow
distributes real estate leads upset
some of the agents who pay to use
the platform, and rising interest
rates and slowing home sales have
put its industry’s growth at risk.
But Zillow, with its $1.1 billion
in annual revenue, remains the
dominant player in online home-
listing, owning “the vast majority
of time” people spend looking at
homes on the web, says Deutsche
Bank analyst Lloyd Walmsley. And
despite the hiccup with its agent
customers, the company registered
a 22% jump in total revenues over
the past year.
Zillow’s newest effort, purchasing
unloved homes and flipping them
for profit, could also become a
growth engine; the company’s
August purchase of Mortgage
Lenders of America could make that
business line more cost-efficient.
Intuitive Surgical(ISRG, $516)
focuses on robot-assisted surger-
ies, and “there’s nothing like it in
the med-tech industry,” says Lee
Hambright, a Bernstein analyst.
Intuitive’s da Vinci Surgical Sys-
tem dominates this field, providing
a tool that enables doctors to per-
formhysterectomies, some pros-
tate procedures, and other surgeries
in more efficient, less invasive ways.
The total number of operations
using robotic systems rose 20%
over the past year. But competitors
have been slow to embrace robot-
ics, giving Intuitive, which brought
in $3.1 billion in revenue in 2017,
more than a decade’s head start. It
leads its industry in another way:
According to Just, ratings from cur-
rent and former Intuitive employ-
ees gave the company’s benefits,
such as its 401(k), higher marks
than those of any other health care
equipment maker.WHAT GOES
AROUND
COMES
AROUND
Research by Just
Capital suggests
that worker pay
and benefits and
shareholder gains
aren’t mutually
exclusive.26
%
Amount above the
national average
that the 100 “most
just” companies in
the Russell 1000
paid their median
employee in 2018.78
%
Share of U.S. survey
respondents who
say they’ve taken
at least one action—
such as buying more
of a company’s
product, mentioning
a company on social
media, or investing
in a company—to
reward its “positive
behavior.”19.4
%
Average annual
return on equity
over the past five
years for companies
that rank in the
top half of Russell
1000 companies on
work/life balance
metrics. That’s
2.3 percentage
points higher than
the bottom half.
SOURCE: JUST CAPITAL