Women-run businesses make up 40% of companies in the U.S. and these are the top five public companies you can invest in.
The world lost a huge voice for women’s rights when Ruth Bader Ginsburg passed away last year. Long known as “the first voice for women’s justice,” Ginsburg was the second woman appointed to the Supreme Court and served as a justice since 1993. From her early days as one of only nine women in her Harvard School of Law class, Ginsburg was a constant advocate for women’s rights, and without her, the corporate and investing worlds would look a lot different. But instead, 40% of companies in the U.S. are women-run businesses and you bet she played a big role.
Because of her and other women and men who supported equal rights for women, we have “come a long way, baby,” as the old Virginia Slims cigarette commercial of the 1960s use to say.
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Women-Run Businesses Trend is Improving
How long a way? Here’s some of the progress women in business have made:
- Of the new appointments in the Fortune 500 in 2020, 47% were women. The boards of Fortune 500 companies are expected to achieve gender parity among the incoming class of directors by 2023.
- Of that 47%, 10% are minority women.
- Every company in the S&P 500 index has at least one female board member.
- On the boards of directors of all Fortune 500 companies, 22.5% have at least one woman member, and 37% have a female CEO.
- According to Fortune, women of color employ 2.4 million people and generate $422.5 billion in revenue (23% of total women-owned businesses’ revenue of $1.4 trillion)
- 40% of U.S. businesses are women-owned.
- Women are starting over 1,800 new businesses every day.
- California was the first U.S. state to require companies that are publicly held to have at least one woman on their board.
- Goldman Sachs will no longer accept companies to go public in the U.S. or Europe “unless there’s at least one diverse board candidate, with a focus on women.”
This research led me to think about the growing number of publicly-held companies that were started by women, and I decided to take a look to see which are the best public women-run businesses – the ones that met my criteria for investment.
It was interesting research, and I learned a few things I didn’t know. For example, did you know that Cisco Systems (CSCO) was co-founded by a woman? Also, my list included 10 biotech/healthcare companies started by women, as well as three very large financial firms, a solar power company, and a cloud-based software firm—industries that, traditionally, we may not think about as the typical “women” businesses.
Now, to be clear—whether a company was founded by or is run by a woman is not one of my investing parameters. It was just a fun way for me to investigate some companies that otherwise might not come to mind.
I sorted through 20+ companies, ran my models, and actually found eight public companies run by women that looked very interesting. From those, I winnowed the list down to my Top 5. Here they are:
Top 5 Public Women-Run Businesses
Catabasis Pharmaceuticals, Inc. (CATB): A clinical-stage biopharma company with drugs in development for muscular dystrophy and cystic fibrosis.
iRobot Corporation (IRBT): This maker of robotic vacuum cleaners, mopping, and lawn mowers (a big thank you from dog owners like me!) is forecast to grow sales at an annual rate of 18% over the next five years.
Sunrun Inc. (RUN): RUN is a solar energy systems manufacturer, and while COVID-19 slowed down the industry last year, 167 GW of renewable capacity became operational last year, with one-half of that attributed to solar photovoltaics. And in 2021, industry growth is expected to further expand. Sunrun is expected to grow sales by 69% this year.
Stitch Fix, Inc. (SFIX): Revolutionizing personal shopping (online), this retailer has seen earnings decline as a result of the coronavirus. But analysts expect the company to bounce back with 21% revenue growth this year and another 18% next year.
Myovant Sciences Ltd. (MYOV): This clinical biopharma focuses on women’s health and endocrine diseases. The shares recently got a lift due to the FDA acceptance of its drug application for relugolix combination, to treat uterine fibroids. Of course, any biotech stock is speculative, but this company actually has approved drugs. I expect a lot more to come.
Just some food for thought, if you’re looking for women-run businesses that are public. As always, make sure before you buy that these companies suit your investing strategy and style.
Which women-run businesses do you have in your portfolio, and do you use it as one of your investing parameters?
Nancy Zambell, Chief Analyst of the Financial Freedom Federation, has spent more than 30 years helping investors navigate the minefields of the financial industry. Nancy's book, Make Money Buying & Selling Stocks is an introduction for new investors and a reminder for experienced investors on how to profit in the stock market.Learn More
*This post was first published in 2020 and is periodically updated to reflect current market conditions.