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Women-Led Firms Outperform in 9-Year Bull Run: 5 Top Picks


With global awareness on gender diversity, the number of female corporate leaders has gone up in recent years. After dropping to 21 in 2016, the number of women CEOs on Fortune 500 increased more than 50% to a record 32 at the start of 2017. However, the number declined to 27 as of January 2018 and will drop further down to 24 by April. Despite this, women hold 21% of board seats at S&P 500 companies per Catalyst, a group researching women and work.

Several researches show that the companies led by women have outperformed the market. According to analysis by the bank Nordea, companies with a woman in the chief executive or chairperson role have performed far better than a major global index over the past eight years. Annualized returns for female-led firms, based on an equal weighting, was 25% since 2009, compared with just 11% for the broader market — the MSCI World Index.

The U.S. stock market is turning nine on Mar 9, representing the second-longest bull run in history after the 1990s rally that ended when the tech bubble burst in 2000. With regard to this, it is worth shedding light on the women leadership over this nine-year period and the outperformance of companies having female employees in top brass.

The list of women CEO in the S&P 500 is still small at nearly 5% of the total. This does not, however, stop us from highlighting five stocks that are headed by women and have easily crushed the nine-year bull market. All these stocks have a solid Zacks Rank #2 (Buy), suggesting their continued outperformance. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Ulta Beauty Inc. ULTA

Based in Bolingbrook, IL, Ulta Beauty is a beauty retailer primarily in the United States and the premier beauty destination for cosmetics, fragrance, skin, hair care products and salon services. The company saw an exceptional surge in its revenue and net income growth to $5.5 billion and $487 million (as of Oct 2017), respectively, from $1.1 billion and $25 million at the start of 2009. As such, the stock skyrocketed 4470% over the trailing nine-year period.

Ulta Beauty has a solid Growth Score of B with projected earnings per share growth of 26.64% for the current fiscal year (ending January 2019). This is much higher than the industry average of 18.16%. Additionally, the stock belongs to a top-ranked Zacks industry (top 18%).

Ross Stores Inc. ROST

Based in Dublin, CA, Ross Stores operates off-price retail apparel and home fashion stores under the Ross Dress for Less and dd's DISCOUNTS brand names in the United States. It primarily offers apparel, accessories, footwear and home fashions. The company’s revenues more than doubled to $14.1 billion in the nine-year bull market while net income jumped to $1.36 billion from $305 million at the start of 2009. The stock gained 927.7% in the same time frame.

Ross Stores also has a solid Growth Score of B with projected earnings per share growth of 12.28% for the current fiscal year (ending January 2019) and delivered average earnings surprise of 6.13% in the past four quarters. It currently falls under a top-ranked Zacks industry (top 43%).

Anthem Inc. ANTM

Based in Indianapolis, IN, Anthem operates as a health benefits company in the United States. It offers a spectrum of network-based managed care health benefit plans to large and small group, individual, Medicaid, and Medicare markets. The company’s revenues climbed 47% to $90.0 billion while net income soared about 54% to $3.84 billion over the past nine years.

The stock returned 638.2% and has a Value Score of B with a P/E ratio of 15.42 versus the industry average of 17.36. It falls under a top-ranked Zacks Industry (top 20%).

General Dynamics Corporation GD

Based in Falls Church, VA, General Dynamics is a global aerospace and defense company that offers a broad portfolio of products and services in business aviation; combat vehicles, weapons systems and munitions; information technology (IT) services and C4ISR (command, control, communications, computers, intelligence, surveillance and reconnaissance) solutions; and shipbuilding and ship repair. The company’s revenues jumped from $29.3 billion at the end of 2008 to $30.97 billion at the end of 2017 while net income rose to $2.91 billion from $2.46 billion. The stock is up nearly 520% in the nine-year bull market.

GD has a solid Growth Score of B with projected earnings per share growth of 11.66% for this year and delivered an average earnings surprise of 4.03% in the past four quarters. It belongs to a top-ranked Zacks industry (top 12%).

Nasdaq Inc. NDAQ

Based in New York, NY, Nasdaq provides trading, clearing, exchange technology, regulatory, securities listing, information, and public company services worldwide. Its revenues grew to $3.96 billion in 2017 from $3.65 billion in 2008 while net income jumped to $734 million from $314 million in the same time period. Shares of NDAQ are up more than 335%.

Nasdaq has a Momentum Score of A with projected earnings per share growth of 18.72% for this year. It has delivered average earnings surprise of 4.72% in the past four quarters but belongs to a bottom-ranked Zacks industry (bottom 44%).

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