As we stand on the brink of a new era, the phrase "The Future is Female" has never rung truer. With women increasingly taking the helm in corporate leadership and the possibility that the US will see its first female president in Kamala Harris, the spotlight on female-led companies is brighter than ever. Investing in stocks led by women aligns with the push for gender equality - and also taps into a wealth of innovative and resilient leadership that can drive significant financial returns. Let’s dive into the exciting opportunities that await.
A New Era of Female Leadership
The Kamala Harris Effect
Imagine the impact of Kamala Harris winning the US presidency. Her ascent would symbolise a breakthrough in gender barriers and inspire countless women in leadership roles across all sectors. As a Democrat Harris’s presidency would likely advocate for policies supporting women in business, potentially providing additional funding and opportunities for female entrepreneurs. In 2022, President Joe Biden’s administration released the US Strategy on Global Women’s Economic Security, which pledged to promote women’s access to well-paying, quality jobs and work opportunities, including supporting female entrepreneurs.
Proven Success of Female CEOs
Women CEOs have consistently demonstrated exceptional leadership, driving their companies to new heights. Here are a few real-life examples:
Mary Barra – General Motors (GM)
Since becoming CEO of General Motors in 2014, Mary Barra has transformed the company into a leader in electric and autonomous vehicles. Under her leadership, GM has not only revitalised its brand but also positioned itself at the forefront of automotive innovation. Barra’s strategic vision and commitment to sustainability make GM a compelling investment opportunity. Barra is the first female leader of a major American automaker. General Motors is currently rated as a ‘Buy’ overall by analysts.
Safra Catz – Oracle Corporation (ORCL)
Safra Catz, co-CEO of Oracle, has been instrumental in steering the tech giant through numerous acquisitions and expanding its cloud services. Her financial acumen and strategic insights have kept Oracle competitive in the fast-evolving tech industry, ensuring steady growth and robust financial health. Oracle Corporation stock is currently rated as a ‘Buy’.
Jane Fraser – Citigroup (C)
As the first woman to lead a major Wall Street bank, Jane Fraser’s role as CEO of Citigroup since 2021 is historic. Fraser’s focus on streamlining operations and expanding digital banking solutions has already started to pay off, with Citigroup showing resilience and adaptability in a challenging financial landscape. In February of this year, some analysts upgraded their verdict of Citigroup based on Fraser’s tactics. This stock is also currently rated as a ‘Buy’ by analysts.
Sectors with High Potential
Technology
The tech industry continues to thrive, with female leaders making significant strides. Companies like YouTube, led by CEO Susan Wojcicki until 2023, are pushing boundaries in digital content and advertising. Investing in tech firms with strong female leadership can offer robust returns as these companies innovate and expand.
Lisa Su has been the CEO of Advanced Micro Devices since 2014, and is an electrical engineer as well as having extensive experience in management roles. She has received and been nominated for a huge number of awards, including recently ranking 49th in Forbes’ 2023 list of the World’s Most Powerful Women. Since she began her role as CEO, AMD’s stock has increased 40-fold. AMD is recommended as a ‘Buy’ by analysts.
Healthcare
Healthcare remains a crucial sector, especially in a post-pandemic world. Emma Walmsley, CEO of GlaxoSmithKline (GSK), has been pivotal in driving forward the company's pharmaceutical and vaccine development efforts. Her leadership is a testament to the impact women can have in high-stakes, high-reward industries. GlaxoSmithKline is currently ranked as a ‘Buy’. This major biopharma company has a presence in more than 75 countries around the world - and also pays its investors dividends.
Consumer Goods
In the consumer goods sector, Michele Buck, CEO of The Hershey Company, has successfully navigated the company through changing consumer preferences and economic uncertainties. Hershey’s strategic focus on product diversification and market expansion under Buck’s leadership showcases the potential for steady growth and stability. Hershey has struggled recently, like other consumer goods brands, due to low sales and high costs - the stock is currently rated as a ‘Hold’. However, on the whole analysts believe that the stock will increase in value in the next 12 months, and the dividends offered by Hershey are ‘Above Average’ according to analysts.
The Investment Case for Female-Led Companies
Stronger Financial Performance
Studies have shown that companies with women in leadership positions can outperform their peers. One study from S&P Global found that women CEOs and CFOs can improve the performance of their company’s stock. Could one reason for this be management style? One study that analysed transcripts of earnings calls found that female CEOs were more likely to use words related to diversity, empathy and adaptability, which could suggest differences at a tactical level.
Enhanced Innovation and Resilience
Diverse leadership teams bring a variety of perspectives, fostering innovation and resilience. Studies have shown that companies with a diverse team of leaders, both in terms of gender diversity and ethnic diversity, are more likely to financially outperform their competitors. Companies that are adept at navigating challenges and capitalising on new opportunities are more attractive to investors looking for long-term growth.
Social Impact and Corporate Responsibility
Female-led companies frequently prioritise social impact and corporate responsibility, aligning with the growing demand for ethical investing. Some studies have shown that businesses with female leaders are more likely to meet or exceed ESG (environmental, social and governmental) standards. These companies are not only financially sound but also contribute positively to society, appealing to a broad range of investors.
Conclusion: Investing in the Future
With Kamala Harris potentially stepping into the presidency and more women making waves in the corporate world, investing in female-led companies is a smart move. These women bring fresh perspectives, foster innovation, and drive sustainable growth. The future is looking more female than ever, and those who are paying attention know it's time to jump on board and capitalise on this exciting shift.
By aligning your investment strategy with the rise of female leadership, you not only support gender equality but also position yourself to benefit from the exceptional performance and vision of women at the top. The future is bright, the future is female, and the time to invest is now.
All stock information is correct at the time of writing.
