Santa's Little Investor: 4 Stocks to Gift This Season
A gift of stock -- even if it's only a share -- helps encourage a lifetime of investing. If you choose well, that gift may even appreciate over time, something that can't be said about this year's hottest video game. More important, there's no assembly required!
Let's go over a few of the kid-friendly investments that are in a good position to continue appreciating over the years.
Let's start with the obvious name: Disney. The family entertainment giant's empire is larger than its namesake theme parks and animated features. Its Capital Cities/ABC acquisition in 1995 brought ESPN and ABC into Disney's portfolio, and since then it hasn't flinched when it had to pay billions to snap up Pixar, Marvel, and more recently, Lucasfilm.
It's a well-oiled machine. Disney taps its rich portfolio of characters to crank out movies that it can then use to cash in on as consumer products, theme park attractions, and TV shows. Disney's in a good place these days, and next year it will begin milking the Star Wars franchise that it recently acquired.
Disney boosted its annual dividend 34 percent to $1.15 a share earlier this month.
Toy companies are logical first investments, but it's hard to find makers of playthings that are worth investing in. Mattel (MAT) is the country's largest toy manufacturer, but it's a mess these days. Sales and earnings are going the wrong way, and it has missed Wall Street's profit targets every single quarter over the past year.
Hasbro is holding up considerably better. Its top and bottom lines are still growing. As Mattel struggles to get Barbie back on track, Hasbro's selling plenty of Nerf, Transformers and Monopoly products. Hasbro also packs a healthy 3 percent yield.
If your child, grandchild, niece or nephew has a thing for iPads, iPhones, iPods, or Macs, then Apple is a good place to start the investing process. The popularity of Apple's products has catapulted the company all the way to the top, commanding the country's most valuable market cap. The majority of its sales is being generated by the iPhone these days, but it's a safe bet that Apple will continue to innovate in the future.
Despite hitting a new high recently that pushed it to a market cap of $700 billion, the stock is surprisingly reasonably priced. Shares of Apple are trading at just 14 times this new fiscal year's projected earnings.
There are now 1.35 billion active users checking into Facebook in any given month, and an average of 864 million of them check in during any given day. The leading social networking website requires users to be at least 13 to join -- so odds are that younger kids may not relate to Facebook as an initial investment -- but young teens can probably appreciate the site's potential.
Some argue that Facebook is not as cool as it used to be. They'll say that kids aren't on Facebook anymore now that their parents and grandparents have taken over. They would rather be on Instagram, with its 300 million registered users who skew younger than Facebook's. That's cool; Facebook owns Instagram, too.
Motley Fool contributor Rick Munarriz owns shares of Walt Disney. The Motley Fool recommends Apple, Facebook, Hasbro, Mattel and Walt Disney. The Motley Fool owns shares of Apple, Facebook, Hasbro and Walt Disney. Try any of our Foolish newsletter services free for 30 days. Want to make 2015 your best investing year ever? Check out The Motley Fool's one great stock to buy for 2015 and beyond.