Apple may have created the iPhone – the gold standard for smartphones – but Apple is not the world’s largest smartphone company. It’s Samsung (OTC Markets: SSNLF), which has also surpassed Nokia to become the world’s largest mobile phone company.
Samsung’s Galaxy smartphones outsell iPhones, and the New York release of the new Galaxy S4 drew the same long lines that are normally associated with Apple fanatics.* Never mind that Samsung phones dominate the Asian market, particularly in China. (Despite Chinese consumers’ insatiable desire for Apple products, most iPhone models can’t be used on the state-owned China Mobile network, which has a 3G standard unique to China.)
Samsung doesn’t just make phones, of course – the company is highly diversified. They do well in televisions, make nice washing machines (full disclosure: I use a Samsung washer and dryer), and I’m told their refrigerators are excellent.
It would take too long to cover all of Samsung’s products and services, but I will mention a couple that are of particular use to ethical investors. Samsung offers fire, marine, accident, casualty, automobile, and life insurance, which are something of a necessity in the modern world. But, my personal favorite is Samsung’s expansion into LED lighting (Samsung’s high-end televisions also use LEDs). Like CFL bulbs some years ago, LEDs come with a price tag that may shock consumers used to incandescent bulbs. However, they last for a VERY long time, use extremely low wattage, and offer better light quality than most fluorescent lights. Not only are they more ecological, they are very economical in the long run. (Although a bit beyond this entry, I feel it’s worth mentioning that Buckingham Palace switched to LED lights for its facade in 2007 – and since the LED bulbs have a 50,000 hour lifespan, they are expected to last approximately 50 years with little to no maintenance.)
Samsung has also decided to investigate all of its Chinese suppliers to ensure their labor policies are being followed, and specifically intends to make sure no children under age 16 are employed in the suppliers’ factories. Labor is always an issue with any product made in China (case in point: Foxconn), but Samsung is still one of the few tech companies to do something about it.
Samsung also has an outstanding balance sheet – more than twice as much cash as debt, strong (but not unsustainable) growth, a healthy profit margin, and P/E just under 10. The stock’s price tag – $1,375.00 per share – will put off plenty of investors, but it’s actually pretty cheap, and I like it under $1,400.00.
Investors should note that Samsung is based in Seoul, South Korea. If hostilities between North and South Korea worsen, then South Korean companies may take a hit. Depending on severity, it might be a great buying opportunity.
*Calm down, Apple fans…I’m writing this on a Macbook, and I never go anywhere without my iPod.
**I do not own Samsung stock and currently have no plans to invest.