Top Stocks with Gender Diverse Leadership

Looking to add female-led companies to your portfolio? These companies have at least a 50/50 male/female management

Sunniva Kolostyak 12 August, 2021 | 8:48AM
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Men and Women symbols

In the UK, about one third of all listed companies have no women at the top level, while even less have an equal split.

According to Morningstar data, only one in 10 companies have more than 40% women at board - and executive levels. So, we bring you the rated companies that have at least 50% split between genders at the top level.

There are a few unrated stocks with an even higher percentage of female leaders: Moneysupermarket.com (MONY), Ascential (ASCL), Keller Group (KLR), Land Securities Group (LAND) and PensionBee (PBEE). At least three out of five leaders at these companies are female, and all (except for recent IPO PensionBee) have had a positive 2021 so far.

However, these six rated stocks that deserve further attention all have 50% female leaders or more, and range from one star to four.

Diageo (DGE)

Alcoholic drinks producer Diageo is one of the most overvalued companies in the UK at the moment, but is also the rated stock with the highest number of female executives and board members, with six women and five men. It has grown 25.82% so far this year as the industry recovers from Covid-19. Over the past three years, the company has grown by 10%, which is in line with the growth of the past 10 years; 13.96% on an annualised basis. The company also has a wide economic moat, and while it only has 1 Star, Morningstar Analysts believe it will take an economic slowdown for the stock to derate.

Royal Dutch Shell (RDSB)

Next in line is Shell. In contrast to Diageo, this was until very recently one of the most undervalued stocks on the London Stock Exchange, but it was recently downgraded to 4 Stars as it has grown 18.44% so far this year, following losses of 40.48% in 2020. The company’s annualised return is -12.05% over the past three years and 3.27% over the past 10. However, our analysts believe the company has an important role to play in the energy transition, as the company is working to expand its renewable energy revenue streams. The company has seven female executives and directors versus six male.

Burberry (BRBY)

The rest of the companies all have a 50/50 male/female split across management. And while fashion house Burberry has a board with five women and six men, it as two female executives and one male. The brand has enjoyed 22.30% growth this year, ironing out the 18.84% losses from last year as sales had a strong rebound in the first quarter. With a consistent message, good control over distribution, and a global presence, Burberry has a narrow moat and is currently fairly valued according to Morningstar’s analysts. It has a three-year annualised return of 0.35% and 1-year return of 6.66%.

Meggitt (MGGT)

Meggitt, a wide-moat stock with 2 Stars, provides aerospace and defense equipment to most large and growing civil and defense platforms. It has three executives, two female and one male, and a board with four women and five men. Recently, Parker Hannifin has made an all-cash offer to acquire Meggitt for 800p per share, valuing the company at £6.3 billion – but US firm TransDigm has just submitted a new offer which values the company at £7.1 billion. In 2021, Meggitt has returned 53.72% (up from -28.97% in 2020) while its 10-year annualised return is 9.68%.

Unilever (ULVR)

Unilever is a company that often pops up when it comes to UK stocks. The company is fairly valued with 3 Stars but has been a consistent dividend payer, topping our list of FTSE dividend stocks several months in a row. It also has a low ESG risk. Although returns in 2021 have been negative so far (-3.95%), the company usually sees steady growth. It grew by 4.29% in 2020, has three-year and 10-year annualised returns of 1.25% and 10.70%. Its board consists of five women and six men but overall, its leadership is 50/50.

London Stock Exchange Group (LSEG)

Lastly, the London Stock Exchange Group is the stock with the best over the long term. Over the past three years, it has seen annualised growth of 21.59%, and 27.20% over the past 10. This year, however, returns are down, at -12.28%. Its board has six women and 7 men, with two female executives and one male. We also believe the stock to be undervalued, with a 4-star rating, and our anaysts believe LSEG is showing promising half-year results after acquiring data specialist Refinitiv.

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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About Author

Sunniva Kolostyak  is data journalist for Morningstar.co.uk