Why Smart Investors Should Check Out These Women-Led Companies
Anyone who doubts the presence of a glass ceiling just needs to look at the numbers: Just 6% of S&P 500 companies have women CEOs. That’s despite a growing body of research that shows that women-led companies tend to perform better.
So should smart investors aim to invest in those rare companies that have women calling the shots?
Women in Leadership Roles Add to Profitability
There’s too much research to ignore. Having more women in corporate leadership roles leads to increased corporate profitability.
The Peterson Institute for International Economics (PIIE) teamed up with EY to review 21,980 global publicly traded companies in 91 countries from a mix of industries and sectors. The results confirmed that having at least 30% of women in C-Suite positions adds an average of 6% to a firm’s net profit margin.
Between 2002 and 2014, 80 firms from the Fortune 1000 with women CEOs bested the S&P 500 performance by 226%, according to a Quantopian study.
The top performers were Mindy Grossman at HSNi, parent of the Home Shopping Network, and Debra Cafaro at Ventas, a healthcare and senior living REIT. During that period, both women leaders increased an initial investment in their companies by more than 500%.
McKinsey has studied this topic for a while and produced an abundance of research. According to the report, Women as a Valuable Asset, "companies where governing positions are held both by men and by women have higher operating margin and market capitalization in the respective industry."
Why Women Make a Financial Impact on Profitability
Women and men have distinct leadership styles and may focus on different aspects of a corporate structure. Their differing backgrounds and experiences create a greater knowledge base than one coming solely from men. Ultimately, by combining diverse groups in leadership roles, a company can achieve greater business results.
Laura D’Andrea Tyson, an economics and business professor at the Haas Business School of the UC Berkley, noted at the 2016 World Economic Forum that women benefit businesses in many ways, including improved innovation and complex decision-making.
Investing Ideas From Women-Led Companies
If you’re looking to capitalize on the business acumen of women in high places, here’s are some funds and stocks to check out. Of course, whenever evaluating a firm or fund for investment potential, do your own due diligence and research.
For the fund investor, consider these two “women-focused” funds:
- Pax Elevate Global Women’s Index fund (PXWEX). This fund invests in the top stocks of companies advancing women’s leadership.
- SPDR Gender Diversity Index ETF (SHE). This recently launched ETF investments in companies with women in “CEO, board or senior leadership” positions.
For individual stock pickers, the following is a list of S&P 500 companies with women CEOs:
- Mary T. Barra, General Motors Company
- Corie Barry, Best Buy Co., Inc.
- Gail K. Boudreaux, Anthem, Inc.
- Rosalind Brewer, Walgreen Boots Alliance
- Michele Buck, The Hershey Company
- Debra A. Cafaro, Ventas, Inc.
- Safra A. Catz, Oracle Corporation
- Joanne Crevoiserat, Tapestry
- Mary Dillon, Ulta Beauty, Inc.
- Jane Fraser, Citigroup, Inc.
- Adena T. Friedman, Nasdaq, Inc.
- Lynn J. Good, Duke Energy Corporation
- Tricia Griffith, The Progressive Corporation
- Vicki Hollub, Occidental Petroleum Corporation
- Jennifer M. Johnson, Franklin Resources, Inc.
- Reshma Kewalramani, Vertex Pharmaceuticals, Inc.
- Christine A. Leahy, CDW Corporation
- Karen S. Lynch, CVS Health Corporation
- Judy Marks, Otis Worldwide Corporation
- Lisa Palmer, Regency Centers Corporation
- Kristin Peck, Zoetis Inc.
- Linda Rendle, The Clorox Company
- Barbara Rentler, Ross Stores, Inc.
- Lori Ryerkerk, Celanese Corporation
- Lisa Su, Advanced Micro Devices, Inc.
- Julie Sweet, Accenture
- Sonia Sygnal, Gap, Inc.
- Carol Tomé, United Parcel Service, Inc.
- Jayshree V. Ullal, Arista Networks, Inc.
- Kathy J. Warden, Northrop Grumman Corporation
It’s not a surprise that women in leadership positions move companies forward financially. If you’re convinced by the research, examine this list of women-run companies and run them through a thorough analysis. You might find some gems worth your investment dollars.