Back to the Office? 1 Stock to Buy and 2 to Sell Amid New Mandates

The return-to-work drumbeat is picking up steam across corporate America. Businesses of all sizes are encouraging workers to get back into the office, citing all kinds of reasons, from increased creativity to better morale.

In March 2022, a survey conducted by Microsoft (NASDAQ:MSFT) found that  50% of companies wanted workers back in the office five days a week. However, when The Conference Board asked more than 1,100 global corporate executives, including 670 CEOs, about their company’s plans for remote work in 2023, only 3% of U.S.-based respondents said they would reduce remote work. 

So, while there have been some high-profile return-to-work announcements recently, hybrid work is here to stay. Moreover, research shows that people are more productive in a hybrid work environment. 

I’ve pulled together three high-profile public companies that have issued return-to-work mandates. One is a buy, while two should be sold. 

Return-to-Work Buy: American Express (AXP)

American Express (NYSE:AXP) might not be one of the top-performing stocks over the past five years, but it has outperformed the S&P 500, which is half the battle. Plus, it provides a decent, if not spectacular, dividend payment with a current yield of 1.4%. And if you’re basing your decision on whether a company is open-minded about a work-from-anywhere model, as I am, AXP is a flat-out buy. 

Companies that think about their employees as assets rather than cannon fodder realize that the easiest way to keep them mentally sharp and physically fit is not to send them on the road every chance they get. It saves money, time and an employee’s sanity. Anyone who’s traveled for business knows that it gets old fast. 

“‘In the past we just got on planes and flew around the world,’ said Sandy Torchia, KPMG’s vice chair of talent and culture. ‘Now we take a step back and say, what is the intention of this interaction?’” the Los Angeles Times reported.  

American Express officially launched Amex Flex in March. This model allows employees to choose where they want to work, whether in the office, at home or a combination of both.

Courtney Dyce, a senior manager with the company, works two days in the office and three at home. In an August company blog post, Dyce wrote: “With Amex Flex, the ability to be present in your child’s life is amazing. I always wanted to give that to my children, but I also wanted to have something for myself, as well. I want to work and I want to impact people, so it’s a balancing act and a huge weight and responsibility.”

Unlike the next company on our list, American Express has chosen to treat its employees as adults.

Return-to-Work Sell: Tesla (TSLA)

Tesla’s (NASDAQ:TSLA) return-to-work policy was made explicitly clear in a June 2022 email sent to employees by CEO Elon Musk: “Everyone at Tesla is required to spend a minimum of 40 hours in the office per week… If you don’t show up, we will assume you have resigned.”

In November, Musk did the same thing at recently acquired Twitter, forcing employees back to the office and setting the expectation of “intense work.”

I’ve been a big fan of Musk’s innovation for more than a decade, saying America needs more Teslas. But the billionaire’s complete lack of understanding regarding human nature suggests Tesla could be ready to follow Twitter into a self-induced implosion. 

Earlier this month, Tesla cut prices on its Model 3 in the U.S. by 14% and its Model Y by nearly 20%. The company is trying to capture market share at the expense of profits in a move similar to what Jeff Bezos might have done in years past with Amazon (NASDAQ:AMZN).

The tweets from irate Tesla customers have been relentless, such as this one from @MarianneSimmons on Jan. 14: “@elonmusk Still no public comment for us @Tesla owners who recently purchased your cars and whom you are now screwing over with the ~20% price reductions? I NEVER thought of buying any other EV prior to this but I’m in the @LucidMotors showroom [right now] and they’re looking promising.”

The emperor wears no clothes. Tesla is a big sell on the news.

Return-to-Work Sell: Goldman Sachs (GS)

I remember when David Solomon succeeded Lloyd Blankfein as CEO of Goldman Sachs (NYSE:GS) in October 2018. Many of the stories at the time highlighted his off-work gig as DJ “D-Sol.” He was the ultimate anti-banker banker. 

Only as it turns out, Solomon is just as uptight as the rest of the banking community. At least, that’s the impression I get from his old-school, five-days-a-week return-to-work program that kicked off in early 2022. In October, Solomon told CNBC about 65% of its staff was back in the office full-time. 

Perhaps Solomon should have been paying more attention to Marcus, Goldman’s failed consumer banking business, than to who was in the office. The bank reported a 66% year-over-year drop in Q4 profits thanks in large part to ventures like Marcus. As a result of its stumble, Goldman plans to lay off up to 3,200 people, depriving them of their jobs and annual bonuses.  

“I don’t want rules. I want a culture where we show up, serve our clients. We work hard. We mentor our people, we teach our people, we strive for excellence,” Solomon told CNBC in October. 

But rules are precisely what he’s trying to impose by forcing employees back to the office five days a week. He doesn’t realize that the work world has changed permanently. Whining about the good old days won’t bring them back. 

Sell GS. Buy Morgan Stanley (NYSE:MS) instead.

On the date of publication, Will Ashworth did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.