The 3 Best Female-Led Stocks to Buy Now

These companies have come some of the best stocks to buy because of their CEOs

Source: Sam Churchill via Flickr

The future is now. Fortune Magazine’s Most Powerful Women Summit wrapped up Oct. 19 in Laguna Niguel, California. The caliber of leaders speaking at the conference was second to none; it even included a man with Goldman Sachs Group Inc (NYSE:GS) CEO Lloyd Blankfein speaking about how his company is empowering women.

I’m not one for attending conferences, but if I were to choose one, Fortune’s MPW Summit would be at the top of my list. Women do great things — I know this simply by watching my wife operate her business — but they could and should be doing so much more if only men would cede some power.

“One in ten directors believes the optimal representation of women on boards should be 20% or less,” PwC’s 2016 Annual Corporate Directors Survey found, and “97% of those who believe this are male.”

With this type of old-school mentality, it’s no wonder that only 4.6% of S&P 500 CEOs are women. It ought to be higher.

Unfortunately, I’m not in a position to make that happen directly, but what I can do is to suggest that investors who feel strongly about women in leadership positions invest directly (not in an index) in some or all (depending on capital available) of the 23 S&P 500 companies where women run the show.

It’s a simple statement that says, “Corporate governance with regards to women must change. Now.”

To get you started, here are my picks for the three best female-led stocks to buy now.

Best Female-Led Stocks to Buy Now: Ventas, Inc. (VTR)

Demographically, the world is getting older. As we age, the need for specialized healthcare and housing becomes vital to our well-being. It’s for this reason that I’m picking Ventas, Inc. (NYSE:VTR), a $37 billion healthcare real estate investment trust, and its CEO, Debra Cafaro.

In 2015, Harvard Business Review named Cafaro one of its top-50 Best-Performing CEOs in the world. It was her third consecutive year on the list, an indication that shareholders have done well under Cafaro’s 17-year tenure as CEO.

How well? When she became CEO in 1999, Ventas had a market cap of $200 million. It’s now at $25 billion, a compound annual total shareholder return of 27%.

On Sept. 1, Ventas acquired Wexford Science & Technology, LLC for $1.5 billion. Included in the deal were 25 properties on or adjacent to the Wake Forest and Duke University campuses with 4.1 million square feet of space, 97% of which is leased.

As the leading provider of capital to senior living and healthcare operators in the U.S., Canada and the U.K., Ventas is ideally positioned to continue benefiting from the global aging trend, especially under Debra Cafaro.

Best Female-Led Stocks to Buy Now: Progressive Corp (PGR)

Many of you probably are most familiar with insurance holding company Progressive Corp (NYSE:PGR) because of their fictional spokesperson, Flo.

However, the Cleveland-based company made a little history this summer when it appointed Tricia Griffith as its CEO, the first woman to lead Progressive in its 79-year history.

I’ll have, to be honest, Progressive was not on my radar of companies to invest in, but the fact that Griffith started as a claims representative 28 years ago and rose through the ranks to become the leader of the $16 billion company tells me this is one company that takes corporate governance seriously.

In fact, PGR has three women on its board out of a total of 10. That might not seem like a lot, but when the average S&P 500 board has 20% representation by women and 11% with none, Progressive’s actually doing pretty well.

Executive Chairman Glenn Renwick, who stepped down as CEO in July after 15 years as CEO, delivered decent shareholder returns. Over the last 15 years, PGR stock had an annualized total return of 8.9%, only 30 basis points higher than its property and casualty peers, but 200 basis points higher than the S&P 500.

Statistics suggest women-led companies perform three times better than the S&P 500. With Tricia Griffith in charge, expect its returns over the next 15 years to be even better.

Best Female-Led Stocks to Buy Now: Reynolds American, Inc. (RAI)

There are 23 women-led companies in the S&P 500. It’s not often, as was the case with Tricia Griffith, that a woman succeeds a man as CEO. While it happens, it’s still rare. It’s even rarer for a woman to succeed a woman in the C-suite.

That’s why my top choice is Reynolds American, Inc. (NYSE:RAI).

On Oct. 19, RAI announced that current CEO Susan Cameron would be stepping down from the top job at the end of the year to be replaced by COO Debra Crew on Jan. 1. Cameron left the company in 2011 after nearly seven years as CEO, ostensibly to put her feet up and enjoy retirement. It didn’t stick. She came out of retirement in 2014 to lead the company through its $27 billion deal to acquire Lorillard.

Now that she’s finished the job, something her male predecessor couldn’t, she’ll head off once more to enjoy retirement, but not before spending six months in the role of executive chairman.

Cigarette companies might be distasteful to many, but the mere fact that it’s enlightened enough to have one woman follow another, suggests Reynolds American — at least when it comes to women and leadership — are way ahead of the curve.

Unfortunately, Debra Crew might not be the CEO of an S&P 500 company for very long. British American Tobacco PLC (ADR) (NYSEMKT:BTI) made a $47 billion offer to buy the 58% of RAI it doesn’t already own. Reynolds’ board is currently considering the offer.

As of this writing, Will Ashworth did not hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, https://investorplace.com/2016/10/the-3-best-female-led-stocks-to-buy-now-debra-cafaro-tricia-griffith-debra-crew/.

©2019 InvestorPlace Media, LLC