avengers endgame black panther

How the Black Panther Invests for Diversity in Corporate America

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How to invest for diversity and minority representation in America

At the end of The Black Panther, King T’Challa made a commitment to support the global community in a new era of outreach.

He may have gotten caught in the snap-ocalypse in Infinity War but we all know Chadwick Boseman will be back in Avengers Endgame so what might that global outreach look like? In what companies would the Black Panther invest?

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avengers endgame black panther

Black Panther Net Worth

Avengers Endgame is out and I’ve been thinking a lot about the daily lives of our favorite Marvel super-heroes. CNN Money estimates that King T’Challa, the Black Panther’s, wealth at an astounding $90 trillion dollars. That’s $10,000 a gram for the 10,000 tons of Vibranium in Wakanda’s vaults from Doomwar #1.

black panther net worth
Black Panther Net Worth

With the King’s commitment to support the global community at the end of the first Black Panther movie, what would that even look like? In what companies might he invest?

Investing for Diversity and Minority Representation

With that, I decided to look into minority representation as CEO and as directors to publicly-traded stocks in the United States. In this video, we’ll look at that research and then three stocks I found with big upside as well as a role in diversity.

Finding diversity in the C-suite of corporate American wasn’t easy. Only two women of color hold the top spot at Fortune 500 companies, that's less than half a percent despite the fact they make up about 20% of the population. And it's not that these women aren't reaching the educational attainment that means more opportunities.

A study of black women graduates of Harvard Business School found that within 40 years of graduation, only 13% of black female graduates reached the senior-executive ranks versus 40% of all Harvard MBAs overall.

black women in business

Evidence suggests that women in general are closing the gap in the board room but that it's not carrying over for minorities. Twenty-seven percent of new directors at companies in the Russell 300 Index were women during 2016 to 2018, up from 21% in the previous three year period according to ISS Analytics.

In 2018 alone, women represented 32% of the corporate board seats in the index. Latino and African-American representation is still well below population though with just 2% of corporate board seats held by those of latin-american descent and just 6% held by African-American boardmembers. This is despite the fact that African-Americans make up 13% of the overall populations and hispanic or latino population accounting for 18% of total U.S. population.

minority representation management corporate america

Insight from the Kellogg School of Management found that diversity on corporate boards led to a greater exchange of information and the perception of conflict, both factors that contributed to better decision-making. Credit Suisse reports that companies with more than one woman on their board returned a compound 2% higher versus those with none and booked higher returns on equity.

Three Companies Supporting Diversity and Minority Representation

So we know where we’re starting from, let’s look at some companies that top the list for diversity and three stock picks I think King T’Challa could be proud of.

Black Enterprise put together it’s 2018 list of 50 best companies for diversity, companies creating a measurable pathway for minority representation in the workforce, senior management and board of directors. Among these were solid stock picks like Ford Motor and General Mills which is in our 2019 Stock Market Challenge portfolio and already up over 30% this year.

Those could be two solid picks to start with but I found three stocks with diversity representation at the top, two stocks the Black Panther himself might invest in.

Marvin Ellison, chariman and CEO of Lowe's, joining the company in 2018 after executive roles at Home Depot and J.C. Penney. Lowes has jumped 15% since his appointment, beating the stock market by nearly 10% and flat performance on shares of Home Depot.

The company is in the middle of a restructuring to increase profitability by cutting non-performing brands and focusing on the U.S. business. Management has targeted a 12% operating profit over the long-term, well above the 9.5% estimate for this year so we could see solid earnings growth on that alone.

Earnings of $5.10 per share are expected 18% higher to $6.04 over the next year and an 18-times price-to-earnings ratio. Shares aren’t cheap but that’s strong growth for a retail company and the industry is relatively safe from the Death-by-Amazon we see across other categories of retail. Shares pay a 1.8% dividend, right around the market average, but the company’s only paying out 37% of profits so lots of room here for growth.

Kenneth Frazier joined pharmaceutical giant Merck as general counsel in 1992 and was named CEO in 2011. Shares have bounced 151% since then, well over the 123% total return on the S&P 500 and almost double the return on the SPDR S&P Pharmaceutical index.

The company is through the worst of its patent cliff of expirations we saw over the past five years and key new products like cancer treatment Keytruda hold multi-billion dollar blockbuster status.

Earnings of $4.34 per share are expected 8% higher to $4.68 over the next year but the company has a great history of beating expectations so I’m thinking $4.80 is probably a closer target for earnings per share. That would put the shares at about 17-times earnings, still not cheap but with some good growth from there. The stock pays a respectable 2.6% dividend yield which represents about half of the profits, leaving plenty of room for R&D spending.

Lisa Su moved to the United States from Taiwan at the age of three. She joined Advanced Micro Devices in 2012 and was named CEO and president of the company in 2014. Since that time, shares have exploded 770% against a return of just 44% on the S&P 500 and well above the 135% total return on the iShares Semiconductor ETF.

The company is really on a roll, recording 23% revenue growth last year and gaining CPU unit share among clients for five-consecutive quarters. More than two-thirds of fourth quarter sales were from new products so that momentum could carry over through the year.

Earnings of $0.46 per share are expected to jump 41% to $0.65 over the next year but that still leaves it at 40-times on a price-to-earnings basis. You might wait for a pullback on this one to get in at a better valuation but there looks like some good long-term growth to the company.

We’re doing a whole series on Avengers Endgame investing from Captain Marvel to Iron Man, SpiderMan and the Black Panther. Be sure to click through to Let's Talk Money on YouTube and tap that Subscribe button so you don't miss it!

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