Womenomics: Firms with female execs perform better, study finds

An analysis by Goldman Sachs found firms that have more women in senior positions as managers or on their boards outperform in their sectors [FILE: …

Companies with a higher presence of female executives have historically rewarded their equity investors with better performance, said Goldman Sachs Group Inc. strategists as they unveiled a basket of European firms that employ an elevated number of women.

“Over more or less any period since the global financial crisis, having more women in senior positions as managers or on the board is associated with company outperformance relative to the sector,” the strategists led by Sharon Bell wrote in a note on Tuesday. They added that this doesn’t apply to all industries and that academic research isn’t yet conclusive on this trend.

Goldman analysts rolled out a new basket of European companies with the most women at all levels, called Womenomics (GSSTWOMN Index), which includes firms such as LVMH Moet Hennessy Louis Vuitton SE, Swedbank AB, Nestle SA and AstraZeneca Plc. French and Nordic companies dominate the list, said the strategists, as France has a quota system for female board members while the Nordic region has historically had higher female labor participation.

Europe is beating the U.S. in its push to make women a more equal part of the workforce, and although the pay gap between men and women remains large in the region, it’s smaller in all major countries in Europe than in the U.S., Canada and in Japan, according to Goldman. Workforce participation rates among women in Europe have been rising, while in the U.S. they’ve been flat since the late 1990s, said the strategists.


The research weighs in on the market debate regarding the importance of investing based on environmental, social and governance principles. Europe has been seeing a boom in appetite for such investing this year, with about 50% of all new exchange-traded funds in Europe, the Middle East and Africa this year ESG-related and accumulating about $4.2 billion in assets, according to Citigroup Inc. data. That compares with $3.8 billion for new non-ESG funds.

ESG Flows

Inflows into ESG-focused strategies may have contributed to the better equity performance among companies with higher female presence, Goldman said.

“The price outperformance may be a function of flows into ESG funds targeting diversity metrics, rather than more women producing better outcomes or lower risks,” the strategists said. “But even if this were the case, we continue to believe investors will value higher social and governance scores for companies, so companies that do perform well on these metrics should continue to attract both flows and a premium.”

As a to-be-sure, Goldman strategists also added that they weren’t able to find a correlation between higher female presence and returns on equity. While the outperformance of companies with more women is “pretty robust” for different time periods, in industries like technology it doesn’t work, according to Goldman, as the sector has been slow to improve its diversity.

They also said that academic research hasn’t been conclusive on whether employing more women means better performance.

Goldman’s Europe Womenomics index is down about 7.8% this year, compared with a drop of 11% for the benchmark Stoxx Europe 600 gauge. Over the past five years, the difference is much more significant, with Womenomics up 22% compared with a gain of around 4.2% for the Stoxx 600.

Covid-19 Effect

The companies in the basket have on average 46% female employees, compared with 36% for the benchmark Stoxx Europe 600 Index. In addition the selected companies have 40% female managers and 42% women on the board.

Goldman doesn’t believe females in the workforce will be more adversely affected than men by the fallout from Covid-19. While women are more heavily represented in such industries as travel, media and retail, which have seen strong profit declines during this year’s crisis, more women are employed by the public sector, where salaries have held up better.

Longer-term social changes as a result of the pandemic could also benefit women, according to Goldman.

“There is likely to be less commuting, more online work and working from home, and this should enhance flexibility for both men and women,” the strategists said. “It is the flexibility of both women and men that we think has been a determinant in increasing women’s participation in the workforce in recent years.”

National Bank of Canada unveils The Family Advantage Fall 2020 Report

Vincent Joli-Coeur, Vice-Chairman, Financial Markets at National Bank of Canada: “We are proud to release the third report of The Family Advantage …

The performance of publicly-traded Canadian family-controlled companies consistently exceeds that of widely held companies

MONTREAL, Oct. 13, 2020 /CNW Telbec/ – National Bank of Canada released today its Family Advantage Fall 2020 report, which helps to better understand the inherent advantages of family-owned companies through an analysis of 38 Canadian corporations under family or founder control. The report clearly demonstrates superior long-term performance of publicly-traded Canadian family businesses.

This year, the publication features the perspectives of nine business leaders whose companies are shaping the Canadian economy: Jenny Coco (Coco Group), Sarah Davis (Loblaw), Stephany Fier (Silvercrest Metals), Christiane Germain (Groupe Germain), Julie Godin (CGI), Linda Hasenfratz (Linamar Corp.), Madeleine Paquin (Logistec), Maureen Sabia (Canadian Tire) and Nancy Southern (ATCO/Canadian Utilities).


  • The report features the NBC Canadian Family Index, calculated by S&P Dow Jones Indices, which tracks and measures the performance of Canadian companies controlled by families and founders against the S&P/TSX Composite Index, the leading Canadian stock market index.
  • Over the past 15 years, the NBC Canadian Family Total Return Index has registered an absolute return of 180.9% compared to 140.5% for the S&P/TSX Composite Total Return Index (7.1% compared to 6.0% in annualized terms).
  • Key findings:


  • Vincent Joli-Coeur, Vice-Chairman, Financial Markets at National Bank of Canada: “We are proud to release the third report of The Family Advantage series and to announce that the NBC Canadian Family Index calculated by S&P Dow Jones Indices continues to show the strong performance of its constituent companies relative to their widely held peers and their long-term focus. The 2020 vintage of the Family Index includes 38 remarkable Canadian success stories, and the total market capitalization of these companies amounts to 22% of total S&P/TSX capitalization.”

  • Dr. Karl Moore, Associate Professor, Desautels Faculty of Management, McGill University and Associate, Green Templeton College, Oxford University: “When National Bank of Canada asked me to interview some of the top women in Canadian family businesses, I was particularly delighted. I had long felt that women in family businesses had been neglected in our thinking about family business in our country. For the majority of the executives we talked to, it was mum and dad who were effectively the co-CEOs of these family firms. In those days the man had to take precedence. Today, thankfully, things are different. Daughters are increasingly the CEOs and rightly so.”

  • Sarah Davis, President, Loblaw Companies Limited, believes family ownership is a key enabler of successfully delivering on transformational long-term objectives: “Patience and long-term vision, enabled by the Weston family’s ownership, were instrumental in taking a bold leap of faith in further expanding Loblaw into the pharmacy segment with our $12.4 billion Shoppers Drug Mart acquisition in 2013.”

  • Julie Godin, Co-Chair of the Board, Executive Vice-President, Strategic Planning and Corporate Development of CGI, on business culture: “Culture should be a continuous evolution, not a revolution. The backbone of CGI’s culture is its commitment to ensuring that the company’s employees have the opportunity to become shareholders. The concept is that when employees are owners, they have a right and responsibility to help shape the company and they feel the accountability for delivering value for all stakeholders.”

  • Maureen Sabia, Chairman of the Board of Canadian Tire Corporation, believes that the mantra of modern boards of directors needs to be changed: “Mere oversight is not enough. To adequately represent the long-term interests of shareholders and other stakeholders, a board has to be an active partner with management to create a path of long-term value generation, combined with a healthy and constructive skepticism of management.

About The Family Advantage 2020 report

The Family Advantage 2020 updates and enriches the 2018 edition of the report. It presents the NBC Canadian Family Index calculated by S&P Dow Jones Indices, which tracks and measures the performance of Canadian companies controlled by families relative to the S&P/TSX Composite Index, the main index of the stock market. The Family Index includes 38 family-owned Canadian companies in different sectors across the country (see the full list of companies included in the Appendix) and is based on the application of objective quantitative criteria to an index universe provided by S&P Dow Jones Indices, the Index calculator.

In the NBC Canadian Family Index, a company is considered to be family-controlled if the founding family or founder(s) directly or indirectly hold at least 10% of the company’s voting rights or, alternatively, if individual(s) and/or related entities hold at least 33.3% of the company’s voting rights (for more information, please see our website here.)

Vincent Joli-Coeur, Stephanie Larivière and Philippe Lefebvre Duquette from National Bank of Canada alongside academic contributor Dr. Karl Moore of McGill University and Oxford University are the co-authors and coordinators of this report.

About National Bank of Canada

With $322 billion in assets as at July 31, 2020,National Bank of Canada, together with its subsidiaries, forms one of Canada’s leading integrated financial groups. It has more than 26,000 employees in knowledge-intensive positions and has been recognized numerous times as a top employer and for its commitment to diversity. Its securities are listed on the Toronto Stock Exchange (TSX: NA). Follow the Bank’s activities atnbc.caor via social media such asFacebook,LinkedInandTwitter.

Regional breakdown of the 38 compagnies included in the NBC Canadian Family Index (June 2020) (CNW Group/National Bank of Canada)Regional breakdown of the 38 compagnies included in the NBC Canadian Family Index (June 2020) (CNW Group/National Bank of Canada)

Appendix (CNW Group/National Bank of Canada)Appendix (CNW Group/National Bank of Canada)

Logo: National Bank of Canada (CNW Group/National Bank of Canada)Logo: National Bank of Canada (CNW Group/National Bank of Canada)

SOURCE National Bank of Canada

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The Dow Gets a Facelift: Salesforce, Amgen and Honeywell to Join the Index

Guru owners of the stock include Primecap management with 17,962,930 shares, Jim Simons (Trades, Portfolio)’ Renaissance Technologies with …

Before the market opens on Monday, Aug. 31, the 30-stock Dow Jones Industrial Average will be replacing Exxon Mobil (NYSE:XOM), Pfizer (NYSE:PFE) and Raytheon Technologies (NYSE:RTX) with Salesforce.com (NYSE:CRM), Amgen (NASDAQ:AMGN) and Honeywell International (NYSE:HON) in a major shakeup for the index.

According to a statement by Dow Jones Indices, the changes “help diversify the index by removing overlap between companies of similar scope and adding new types of businesses that better reflect the American economy.”

Such a big change is unusual for the index, as Howard Silverblatt, senior index analyst at S&P Dow Jones Indices, told CNBC in an interview about the topic. The last time three Dow stocks were replaced at once was in 2013, when Alcoa (NYSE:AA), Bank of America (NYSE:BAC) and Hewlett-Packard (NYSE:HPQ) were booted off and replaced with Goldman Sachs (NYSE:GS), Nike (NYSE:NKE) and Visa (NYSE:V).

Why the shakeup?

Unlike the S&P 500, which is based on market cap, the weighting of the stocks that make up the Dow depends on share price. Apple’s (NASDAQ:AAPL) stock split thus dropped it from the most influential company in the index to the 17th most influential. Once the new changes go into effect, Amgen will be third on the index, with Salesforce coming in sixth and Honeywell 11th. UnitedHealth Group (UNH) will become the most heavily weighted component.

The changes seem to have been largely prompted by Apple’s four-for-one stock split, which will go into place on Aug. 28, but that doesn’t fully account for the change, as Salesforce is the only tech company replacing a non-tech company. Silverblatt noted:

“Basically Apple — by itself — took the technology [weighting] within the Dow down from 27.6% to 20.3%. It’s a significant decline. By adding Salesforce, you can come back to 23.1% of the Dow being in technology.”

The 30-stock index aims to reflect the overall American economy. While this is by no means an exact science, some analysts seem to disagree with the 4.5% reduction in tech exposure that all of the above changes will bring about, speculating that with less Apple to do the heavy-lifting, the index will continue to underperform the Nasdaq and the S&P 500.

Salesforce to replace Exxon Mobil

What seems to have surprised Wall Street the most is the exclusion of Exxon Mobil from the index. The oil giant, which will be replaced with subscription-based customer management software provider Salesforce, is one of the top players in the struggling oil and gas industry. The Dow Jones Indices team’s decision to replace it could indicate that they expect the energy sector, or at least the oil and gas sector, to make up a smaller portion of industrial production in the long term.

Shares of Salesforce are up approximately 4% to trade around $216.95 on Aug. 25 following the announcement of its coming inclusion in the Dow.


GuruFocus gives Salesforce a financial strength rating of 7 out of 10 and a profitability rating of 5 out of 10. The Altman Z-Score of 6.36 indicates that the company is safe from bankruptcy. The three-year revenue growth rate is 18.6%, while the three-year earnings per share without non-recurring items growth rate is -31.2%.

Top guru shareholders of the stock include Ken Fisher (Trades, Portfolio) with 11,506,350 shares, Spiros Segalas (Trades, Portfolio) with 7,195,961 shares and Steven Mandel with 3,045,252 shares.

Amgen to replace Pfizer

The switch from Pfizer to Amgen is trading a more traditional drug manufacturer for a biotech drug manufacturer, but Amgen’s share price is approximately six times that of Pfizer, which will result in an overall increased weighting of the sector. Additionally, while Pfizer has had a tough year as one of the Dow’s worst-performing stocks, Amgen has gained 25% over the past year.

Shares of Amgen are up approximately 5% to trade around $248.27 on Aug. 25 following the announcement of its coming inclusion in the Dow.


GuruFocus gives Amgen a financial strength rating of 4 out of 10 and a profitability rating of 9 out of 10. The Altman Z-Score of 2.18 indicates that the company is not likely to face bankruptcy in the next two years. The three-year growth rate of 8% and three-year EPS without NRI growth rate of 7.9% are outperforming 53% of industry peers.

Guru owners of the stock include Primecap management with 17,962,930 shares, Jim Simons (Trades, Portfolio)’ Renaissance Technologies with 1,611,614 shares and Pioneer Investments (Trades, Portfolio) with 1,155,552 shares.

Honeywell to replace Raytheon

Raytheon Technology’s stock has had a notoriously bad run after United Technologies and Raytheon merged to form the aerospace and defense giant, spinning off most of the businesses that were not related to this industry in the process (such as elevator division Otis (OTIS) and HVAC division Carrier (CARR)). While Honeywell also has some aerospace operations, it is a more diversified industrial products company, with operations in building technologies, performance materials and technologies and safety and productivity solutions.

Shares of Honeywell are up approximately 5% to trade around $164.53 on Aug. 25 following the announcement of its coming inclusion in the Dow.


GuruFocus gives Honeywell a financial strength rating of 6 out of 10 and a profitability rating of 8 out of 10. The Altman Z-Score of 3.47 represents solid financial stability. The three-year revenue growth rate is -0.3%, contrasting the three-year EPS without NRI growth rate of 10.6%.

Mairs and Power (Trades, Portfolio) is the biggest guru shareholder of the company with 1,203,638 shares, followed by Pioneer Investments with 1,176,802 shares and Diamond Hill Capital (Trades, Portfolio) with 1,140,977 shares.

Disclosure: Author owns no shares in any of the stocks mentioned. The mention of stocks in this article does not at any point constitute an investment recommendation. Investors should always conduct their own careful research and/or consult registered investment advisors before taking action in the stock market.

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New Samvat will be a year of midcaps & smallcaps; stock picking will be key

Mumbai: Samvat 2076 may be a year of the midcap and smallcaps, as value has started emerging after this pack underperformed for two consecutive …
Mumbai: Samvat 2076 may be a year of the midcap and smallcaps, as value has started emerging after this pack underperformed for two consecutive Samvats in 2075 and 2074, say analysts.

However, identifying the right stocks in this space would be the key.

In Samvat 2075, while the 30-share BSE Sensex rose 11 per cent, BSE Midcap index dropped 2.1 per cent and the Smallcap index 9 per cent.

In Samvat 2074, Sensex climbed 8 per cent, while BSE Midcap index fell 8.4 per cent and the Smallcap index 15.6 per cent value.

The value erosion was more pronounced in stocks which high leverage and later faced liquidity crisis.

Gaurav Dua, Senior Vice-President and Head of capital market strategy & investments at Sharekhan by BNP Paribas, expects the situation to improve for midcap and smallcap companies after the severe correction in last two years.

“Almost 55 per cent of the broader market has corrected by over 40 per cent, and value is beginning to emerge in certain pockets,” said Dua.

Kotak Securities expects midcaps and smallcaps to outperform Sensex and Nifty because of their beaten down nature and valuations.

“Excluding Nifty stocks in the BSE500 pack, there are more than 200 companies that had paid more than 30 per cent corporate tax in financial year 2019. Post corporate tax cut, investor interest in midcaps and smallcaps should revive gradually, as earnings could improve with immediate effect and revenue growth could come with a lag of one or two quarters,” said Rusmik Oza, Head of Fundamental Research at Kotak Securities.

“Many midcap stocks have deleveraged their balance sheets and the recent tax cut could enhance their return of equity (RoE). This should help improve valuations for many of these stock in the new Samvat,” he said.

Many of over a dozen brokerages and investment houses that participated in the ETMarkets.com Samvat Survey, said they expect midcaps and smallcaps to rebound and outperform their larger peers in the year ahead.

However, quality and stock picking would be key from the investor point of view, and one cannot paint all the stocks in the midcap and smallcap categories with the same brush.

“One has to be stock specific. A bottoms-up approach based on company fundamentals should be the only criteria. Specific, glowing outperformance is expected in midcap and smallcap segments,” said Dharmesh Kant, Head of Retail Research at IndiaNivesh Securities.

Ajit Mishra, Vice-President for Research at Religare Broking, says the recovery in midcaps and smallcaps may not be as broadbased as was seen in 2017.

“We expect a rebound in stocks that are trading at attractive valuations and have sound business models with good growth prospects and corporate governance,” Mishra said.

In the Hindu accounting year Samvat 2075 that ended on Saturday, 56 of 103 components of BSE midcap index shed value, while 552 of 712 components of BSE smallcap index eroded market capitalisation, clearly suggesting that the extent of meltdown was more pronounced in smaller stocks.

In the same period, 12 of 20 Sensex stocks declined.

Among midcap stocks, Indiabulls Ventures fell the most among midcaps with a 78 per cent value erosion, while Cox & Kings was the biggest value destructor among smallcap stocks, with a value erosion of 99 per cent.

Fourteen smallcap stocks eroded more than 90 per cent value. They included Talwalkars Healthclubs, Mercator, McLeod Russel India, Reliance Communications, Reliance Capital, Reliance Infrastructure, Reliance Home Finance, Reliance Power, Sintex Plastics Technology, Ballarpur Industries, Sintex Industries , Dewan Housing Finance Corporation and Housing Development & Infrastructure.

Stocks Sharply Lower

Health-care stocks took the biggest shiners, as Bausch Health Companies, faltering $2.90, or 10%, to $26.00, while Aurora Cannabis skidded 38 cents …
Stocks in Toronto took the brunt of investor hesitancy, as weakness in health-care and energy stocks took their toll.

The TSX Composite Index plunged 210.97 points, or 1.3%, to wrap up a tumultuous Tuesday at 16,477.66

The Canadian dollar nicked ahead 0.11 cents at 75.64 cents U.S.

Health-care stocks took the biggest shiners, as Bausch Health Companies, faltering $2.90, or 10%, to $26.00, while Aurora Cannabis skidded 38 cents, or 6.7%, to $5.43.

In the oil patch, Ensign Energy slouched 26 cents, or 8.5%, to $2.80, while Whitecap Resources sank 31 cents, or 6.7%, to $4.29.

Industrials were also roughed up, as Bombardier dipped 19 cents, or 9.5%, to $1.62, while SNC-Lavalin fell $1.16, or 6.2%, to $17.50,

On the economic front, Statistics Canada says this country’s economy was essentially unchanged in July as a decline in goods-producing industries was offset by an increase in services-producing industries,

Meanwhile, the seasonally-adjusted IHS Markit Canada Manufacturing Purchasing Managers’ Index rose back above the 50.0 no-change mark in September, posting 51.0 from 49.1 in August. The rate of improvement in the health of the sector this signaled was modest, but the most marked in seven months.


The TSX Venture Exchange dropped 3.77 points Tuesday to 554.91

All but two of the 12 Toronto subgroups remained negative on the day, with health-care ailing 5.2%, while energy subsided 3.4%, and industrials stumbled 3.4%

The two gainers were communications, better by 0.3%, and gold, up 0.2%


Stocks dropped on Tuesday, the first trading day of the fourth quarter, as disappointing manufacturing data stoked worries over the U.S. economy.

The Dow Jones Industrials plunged 343.79 points, or 1.3%, to 26,573.04

The S&P 500 slumped 36.49 points, or 1.2%, to 2,940.25

The NASDAQ Composite subtracted 90.65 points, or 1.1% to 7,908.69

Investors entered the fourth quarter with the major averages struggling to reach record highs set earlier in the year. The Dow and S&P 500 were more than 1% from their all-time highs following several failed attempts at to break them. The NASDAQ is about 4% below its record.

The Institute for Supply Management said U.S. manufacturing activity contracted to its worst level since June 2009.

Shares of manufacturers such as Honeywell, 3M and Eaton rolled over on the data release, trading at least 2.8% lower.

In corporate news, Charles Schwab shares dropped nearly 10% after the brokerage said it’s ending commissions on stock trading. TD Ameritrade plunged more than 20% on the news while E-Trade slid 16.4%.

U.S. and Chinese negotiators are expected to meet next week in Washington to discuss a potential trade deal between the world’s largest economies.

Prices for the benchmark 10-year U.S. Treasury were slightly higher, lowering yields to 1.64% from Monday’s 1.67%. Treasury prices and yields move in opposite directions.

Oil prices gave back 49 cents to $53.58 U.S. a barrel.

Gold prices regained $15.10 to $1,488.00 U.S. an ounce.