Investors are betting big on female corporate leadership.
While women are steadily making progress in the global business world, Fortune reported last year that there are 37 female CEOs among Fortune 500 companies — or less than 8%. Diversity at the executive level provides companies with much-needed alternative viewpoints and fresh perspectives. Here are eight stocks of female-led companies that investors should buy today, according to Bank of America.
General Motors (ticker: GM)
General Motors CEO Mary Barra took the helm in January 2014, and GM shares are up roughly 40% under her leadership. Barra began working for GM way back in 1980 as a co-op student at the age of 18. She was also elected to the Walt Disney Co. (DIS) board of directors in 2017. Analyst John Murphy says GM management is doing an excellent job of maintaining its profitable core business while also investing in future mobility initiatives, such as autonomous vehicle technology, car sharing and connectivity. Bank of America has a “buy” rating and an $80 price target for GM stock.
United Parcel Service (UPS)
United Parcel Service CEO Carol Tomé took over in June 2020. Tomé previously served as the chief financial officer for home improvement giant Home Depot (HD) for 18 years, and Home Depot stock gained more than 450% during that time. In less than seven months at her current position, UPS shares are already up nearly 80%. Analyst Ken Hoexter says economic recovery, e-commerce growth and restocking demand are all near-term tailwinds for UPS. The company is also working to make its domestic delivery business more efficient. Bank of America has a “buy” rating and a $183 price target for UPS stock.
Best Buy (BBY)
Best Buy CEO Corie Barry is one of the youngest female CEOs in the Fortune 500 at age 44. Barry took over as CEO in June 2019. Investors certainly approve of her performance up to this point given Best Buy stock is up nearly 90% in less than two years since she took the position. Analyst Curtis Nagle says Barry has Best Buy well-positioned to thrive in a post-pandemic world in which health, 5G connectivity and home productivity are priorities for electronics consumers. Bank of America has a “buy” rating and a $132 price target for BBY stock.
General Dynamics (GD)
General Dynamics CEO Phebe Novakovic became the company’s first female CEO in January 2013, and shares are up roughly 170% under her leadership. Novakovic previously worked for the U.S. Department of Defense before joining General Dynamics in 2001 and becoming chief operating officer in 2012. Analyst Ronald Epstein says General Dynamics’ Gulfstream subsidiary is the “best aerospace company in the world,” and the Department of Defense’s focus on the Navy bodes well for General Dynamics’ Marine business in coming years. Bank of America has a “buy” rating and a $200 price target for GD stock.
Progressive Corp. (PGR)
Progressive CEO Tricia Griffith joined the company as a claims representative in 1988 and worked her way up to become CEO in July 2016. Griffith subsequently became the first woman ever named Fortune’s Businessperson of the Year in 2018. During her tenure as CEO, Progressive shares are up nearly 100%. Lower interest rates are weighing on insurance investment yields. However, analyst Joshua Shanker says Progressive’s current valuation does not reflect the sustainability of its earnings or its potential to grow premiums without sacrificing margins. Bank of America has a “buy” rating and a $126 price target for PGR stock.
Northrop Grumman Corp. (NOC)
Northrop Grumman CEO Kathy Warden became the company’s first female CEO in January 2019, and shares are up roughly 40% under her leadership. Warden joined the company in 2008 before making the jump to president and COO in 2017. Northrop secured a key Department of Defense Next-Generation Interceptor contract in March, and Epstein says the company generates high-quality earnings and cash flow. He says sizable share buybacks should boost earnings per share in the next five years. Bank of America has a “buy” rating and a $455 price target for NOC stock.
Occidental Petroleum Corp. (OXY)
Occidental Petroleum CEO Vicki Hollub took over her role in April 2016 and has navigated the company through an extremely difficult period in the oil and gas industry. Occidental shares are down 64% since Hollub took over, but analyst Doug Leggate says the company has finally turned a corner. Leggate says Occidental will be one of the biggest beneficiaries of a potential multiyear recovery in commodity prices, and it has one of the highest free cash flow yields among U.S. oil stocks. Bank of America has a “buy” rating and a $40 price target for OXY stock.
Kohl’s Corp. (KSS)
Kohl’s CEO Michelle Gass has been with the company since 2013 and took over the CEO position in May 2018. Like Hollub, Gass has served during an extremely difficult period for apparel retailers, but Kohl’s shares have held up relatively well during her tenure, down just 4% overall. Kohl’s recently struck a deal with activist investors to add three directors to its board, and analyst Lorraine Hutchinson says the new board members should help the company realize its significant turnaround potential. Bank of America has a “buy” rating and a $75 price target for KSS stock.
Eight top stocks to buy led by female CEOs:
— General Motors (GM)
— United Parcel Service (UPS)
— Best Buy (BBY)
— General Dynamics (GD)
— Progressive Corp. (PGR)
— Northrop Grumman Corp. (NOC)
— Occidental Petroleum Corp. (OXY)
— Kohl’s Corp. (KSS)
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