The Women’s Executive Network released its 14th annual list of Canada’s 100 Most Powerful Women November 24. Several of the winners serve on the corporate boards of TSX companies.
That’s great news for women and even better news for investors in those companies.
The Canadian Securities Administrators recently surveyed 677 TSX-listed companies about the number of women currently serving as directors on their boards. Of the 215 largest issuers ($1 billion market cap or higher), 18% of those board seats are held by women, an increase of two percentage points over its 2015 survey. Go even larger ($10 billion market cap or higher), and the representation by women jumps to 23%–also a two-percentage-point increase over the previous year.
The tide is turning; corporate Canada is the chief beneficiary.
Out of the 100 award winners, I’ve highlighted five investment possibilities. Together, they have the makings of a very focused five-stock portfolio.
WXN Network five-stock portfolio
|Isabelle Marcoux||Transcontinental Inc. (TSX:TCL.A)||Industrials||12.4%|
|Siân Matthews||Tricon Capital Group Inc. (TSX:TCN)||Financials||6.8%|
|Kathleen O’Neill||Finning International Inc. (TSX:FTT)||Industrials||45.8%|
|Kathleen Taylor||Royal Bank of Canada (TSX:RY)(NYSE:RY)||Financials||28.8%|
|Benita Warmbold||Methanex Corporation||Basic Materials||18.5%|
Source: Morningstar. Returns through Nov. 23
Do you think it’s a coincidence that each of these stocks is performing well with one of the 100 most powerful women in Canada serving on their board? I sure don’t.
Anyway, here’s what I like about each stock.
The perception is it’s a big business in a dying industry. However, it generates significant free cash flow–plenty to pay its 3.9% dividend yield, which is much higher than the S&P/TSX Composite’s average yield.
Marcoux is the daughter of founder Remi Marcoux. Not only does she serve on its board, but she’s the chairman. Other board seats include George Weston and Power Corporation. She’s a major influence in corporate Canada.
I recently highlighted two stocks that investors could buy for the same price combined as Canopy Growth Corp., one of the hottest stocks anywhere. The real estate asset manager has got a diversified group of revenue streams that should keep it growing for years.
Matthews, a Calgary tax lawyer recognized as one of the best in the country, transitioned from her law practice in 2009 into the world of corporate directorships and consulting. She also serves as the chairperson for Canada Post.
Very few companies have been as hurt by the commodity downturn than Finning, whose customers buy and rent a lot of Caterpillar heavy equipment for performing mining, construction, forestry, and oil operations in Canada, U.K., and South America. Business is rebounding, and the stock price is rebounding with it.
With a background in banking at Bank of Montreal, O’Neil became a professional director in 2005, sits on several other boards, and has been a Finning board member since 2007. This is her third time on the WXN list.
Royal Bank of Canada
Well, there’s not much that needs to be said about Royal Bank. The biggest of Canada’s banks, with the exception of the Bank of Nova Scotia, Royal Bank stock has the best performance year-to-date.
Possibly overexposed to the Canadian market, where it generates two-thirds of its revenue, Royal Bank chair Kathleen Taylor’s experience outside Canada as CEO of Four Seasons Hotels should come in handy as it looks to acquire banks elsewhere.
Earlier this year, Fool.ca contributor Ryan Vanzo expressed caution for investors considering purchasing the methanol producer’s stock because methanol prices looked to remain at historically depressed level. At the end of October, Methanex reported better than expected Q3 2016 earnings and is projecting business to pick up well into 2017, which bodes well for its stock.
Benita Warmbold is CFO of the Canada Pension Plan Investment Board and brings to Methanex more than 30 years’ finance experience. I guess that’s why she’s on its audit committee.
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Fool contributor Will Ashworth has no position in any stocks mentioned. Finning International is a recommendation of Stock Advisor Canada.