Did you know that companies with women CEOs tend to outperform their peers?
It’s not common knowledge, but it’s true.
According to Gitnux, companies with women CEOs have a 74% return on assets, higher than the 69% achieved by male-led companies. Other studies have found that companies with women in leadership positions have better overall profitability than those without women in leadership positions.
Some people imagine that business is all about being as “macho” as possible, but the data tells a different story. With that in mind, here are three Canadian women-led companies whose shares are outperforming the market.
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Canadian National Railway
The Canadian National Railway (TSX:CNR) is a Canadian railroad company run by CEO Tracy Robinson. Robinson spent the majority of her career at the Canadian Pacific Railway. She transferred to CN Railway when former CEO J.J. Ruest stepped down.
CN Railway stock has outperformed the TSX Index over the last five years. In that time, CNR stock has risen 49%, while the index has risen only 23%.
What explains CNR’s outperformance?
For one thing, the company has an economic moat, with only one major competitor in Canada (Canadian Pacific), and only a small handful in the United States. For another thing, it’s very profitable, with a 30% profit margin and 38% earnings growth. Finally, it pays a dividend, which helps compound investors’ returns even further than what’s realized through gains in the stock price. It all adds up to a very compelling package.
Canadian Utilities
Canadian Utilities (TSX:CU) is a Canadian utility run by Nancy Southern. Southern has been on CU’s board of directors since 1989, and has been CEO since 2003. Since the lows in 2003, Canadian Utilities stock has risen 147%. It has also paid a very high dividend the entire time. Factoring in both dividends and capital gains, CU stock has outperformed the TSX Index over the last 20 years.
What makes CU such a stable and dependable company?
For one thing, it’s a utility, and like most utilities, it has a very stable revenue stream. Utilities lock in recurring revenue as part of packages tied to peoples’ homes. As a result, their revenue keeps coming in even during recessions.
For another thing, CU is well run. It has a competent CEO who re-invests in the business and has grown it over the years. Overall, Canadian utilities is in good hands.
ATCO
ATCO Group (TSX:ACO) is a diversified holding company with assets in utilities and construction. This company is also run by Nancy Southern; it is a part owner of Canadian utilities.
ATCO owns a number of different assets; broadly speaking they fall under the “infrastructure” umbrella. They include structures, natural gas, hydrogen, retail energy and electricity.
ATCO is a pretty successful company. It has an 8% net margin, a 14.4% 10-year earnings growth rate, and a long-term trend of growth in book value. Overall, it’s a well-managed company that has rewarded shareholders well over the years.
