Published Tue, 4 Dec 2012 11:00 CET by TopYields.nl
The connection between gender and corporate profitability does not appear to be so obvious, but empirical research shows that higher participation of women in corporate management is good for the company's bottom line. While the share of women chief executives at the helm of the world's 1000 largest companies remains low at 4% and the percentage of women as executive officers hovers around 14.6%, companies managed by women tend to outperform their peers based on several profitability metrics. Moreover, among the most prominent corporations run by women, several pay attractive dividend yields.
Evidence from empirical studies of the positive effect from women's participation in executive decision-making on corporate bottom lines is plentiful. According to a multi-annual study by Pepperdine University of the performance of about 200 of the Fortune 500 companies (the ones providing gender breakdown of their executives), it was concluded that the “correlation between high-level female executives and business success has been consistent and revealing.”
Two studies from Catalyst, a non-profit organization that seeks to expand women's roles in the workplace, and a business consultancy McKinsey & Co., support this assertion. The two studies have found that Fortune 500 companies with more women on their boards/executive committees show better financial performance than those with no or low number of women executives. According to Catalyst, in terms of returns on equity, Fortune 500 companies with 3 or more women on the boards/executive committees outperform those with the least by 53%. In terms of returns on sales and returns on invested capital, Fortune 500 companies with 3 or more women on the boards/executive committees outperform their peers with the least by 42% and 66%, respectively. McKinsey has found similar results in its study, concluding that companies with the highest percentage of women in executive bodies show the best performance.
Now, while the share of women in top executive posts has increased over the past several decades, it remains low by all means. The number of female corporate officers in Fortune 500 companies increased from 11.2% in 1998 to a peak of 16.4% in 2005. It has since dropped to about 15.7%. According to Catalyst, at the observed rate of growth, “it would take 40 years for the number of female corporate officers to match the number of male officers.” On the other hand, the share of women-held board seats has risen progressively from 9.6% in 1995 to 16.1% in 2011. However, in terms of Chief Executive Officers (CEOs), the share of women in top post remains low at 3.8% of the Fortune 500 companies, or 19 in total.
Among Fortune 500 companies, several female-led corporate giants are dividend-paying corporations with a long history of strong earnings power and consistent dividend growth. In fact, out of 19 Fortune 500 companies led by women, 14 or 74% pay a dividend. The largest Fortune 500 company led by a woman is Hewlett-Packard (NYSE: HPQ). Managed by Meg Whitman as CEO, HPQ, the tenth on the list of the world's largest Fortune 500 companies, currently does not espouse all the aforementioned qualities of the women-led corporate giants. In fact, the stock, which has fallen precipitously by 53% over the past year, is a value trap, although it boasts a high dividend yield of 4.1%.
Stock symbol(s): ADM,CPB,DD,FTR,GD,HPQ,IBM,LMT,PEP,SRA,XRX
|Stock name||ISIN||Last trade||P/E||EPS||Div PS||Ex Div Date||Payout Ratio||Div Yield|
|FRONTIER COMMUNICATIONS||US35906A1088||5.87||58.4||0.1||0.40||Jun 05 2014||392||6.81|
|LOCKHEED MARTIN||US5398301094||170.04||17.5||9.7||5.32||May 29 2014||55||3.13|
|DU PONT||US2635341090||64.93||20.6||317.0||1.88||May 13 2014||1||2.90|
|CAMPBELL SOUP||US1344291091||43.50||20.5||2.1||1.25||Jul 03 2014||59||2.87|
|PEPSICO||US7134481081||91.55||20.7||4.4||2.62||Jun 04 2014||59||2.86|
|IBM||US4592001014||194.40||12.4||15.8||4.40||May 07 2014||28||2.26|
|GENERAL DYNAMICS||US3695501086||121.14||16.8||7.2||2.48||Jul 01 2014||34||2.05|
|ARCHER-DANIELS-MIDLAND||US0394831020||48.12||24.0||202.0||0.96||May 13 2014||0||2.00|
|XEROX||US9841211033||13.15||13.8||0.9||0.25||Jun 26 2014||27||1.90|
|HEWLETT PACKARD||US4282361033||35.43||12.3||2.8||0.64||Jun 09 2014||23||1.81|
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