6 Stocks to Fall in Love With This Valentine's Day
Some stocks are fun for a fling. Others, you'll want to keep close for a lifetime. How can you tell the difference? Take a cue from online dating.
Just as every Match.com, OkCupid or eHarmony profile reveals the strengths, weaknesses, and quirks of a potential mate, every public company reports income, cash flow, and the balances of its various accounts each quarter. The better the financial story, the more datable the stock. (For more on the basics of stocks and investing, visit DailyFinance's Investing Courses.)
Now, ready to find your financial Valentine? Here are six stock "profiles" to consider, offered in alphabetical order and rated according to their long-term suitability for your portfolio:
1. Sensible bohemian with a creative streak seeks same. That's right, we're talking about Apple (AAPL). Apple has made little progress over the past year with its shares trailing the market's return by about 3 percent, yet Wall Street may be holding the company to an unreasonable standard. For example, Apple sold more than 51 million iPhones in the first quarter of fiscal 2014 -- a 6.8 percent improvement year over year. Analysts nevertheless wanted to see Apple move 55 million handsets. The stock promptly fell and is still recovering. How is that fair?
Apple remains one of the world's great consumer electronics brands and has hired aggressively to cash in on disruptive opportunities in wearable computing and on-demand entertainment. Mix in more than $150 billion in cash and investments and a dividend that yields 2.40 percent as of this writing, and you've got a stock worthy of bringing home to Mom -- Birkenstocks and all.Rating:Marry it!
2. Spirited stock looking for a partner on the offbeat path. Who wins "The Hunger Games" if not Lions Gate Entertainment (LGF)? The studio's stock is up more than 60 percent over the past year, and not just because of Jennifer Lawrence's onscreen heroics. Lions Gate has also enjoyed a string of horror hits and lucrative television distribution deals with the likes of Netflix (NFLX) and AMC Networks(AMCX). A new franchise in the making -- "Divergent," starring actress Shailene Woodley -- is set to screen in March. More than 683,000 like the film on Facebook (FB). Expect them to show up in force and create a nice bump in profits heading into the summer quarter, building to a crescendo when "The Hunger Games: Mockingjay -- Part 1" hits theaters this November. Time to join the revolution. Rating: Date it.
3.Charming style maven will put stars in your eyes. From fashionistas to family men, Michael Kors (KORS) is setting the style trends for a growing number of us. Revenue soared 59 percent in the latest quarter to more than $1 billion, well ahead of analyst estimates. Profits jumped more than 73 percent over the same period. %VIRTUAL-article-sponsoredlinks%That growth is continuing at such a stunning pace is likely a testament to the company's accessible portfolio. Everyday shoppers can find a Michael Kors watch selling for as little as $180 or as much as $895. A diverse mix allows the retailer to sell luxury to those who might otherwise avoid a top-name brand such as Coach (COH), whose same-store sales fell more than 13 percent even as Kors was reporting a 24 percent gain on the same basis. The shift seems destined to continue for many years, making this stock a nice fit for all seasons. Rating: Marry it!
4.Funny, creative, and -- oh yeah -- I'm a cheap date! Think flying Southwest Airlines (LUV) is a bare-bones experience? Then you haven't tried Spirit Airlines (SAVE). The jetsetter is quick to embrace bad taste if it'll earn or save a buck. (A recent promotion appeared to play off Toronto mayor Rob Ford's drug woes.) Maybe that's why the stock trades for only 19 times estimates. Investors ought to be paying more -- especially with analysts calling for better-than-30 percent annual profit growth over the next five years. Not bad for a cheap fling. Rating: Date it.
5.Thrill seeker in need of a kindred spirit. Looking for a bit more adventure? Take-Two Interactive (TTWO) may be just the stock for you. Home to what is now a better-than $2 billion franchise in "Grand Theft Auto V", the company trades for just $1.6 billion in market cap. That won't last long. New versions of the game are in development for the Xbox One, PS4, and possibly PCs. Meanwhile, analysts at Sterne Agee say an online version of the game could bring in as much as $100 million in annual revenue. Talking about stepping on the gas. Rating: Date it.
6. Your Mom approves of me. Really. Finally, the safe choice. Walt Disney (DIS) is the sort of sweater-wearing, PC, get-the-chores-done-on-time stock that any parent would want for their child's portfolio. And with good reason: Disney is the world's largest licensor of branded products, operates the most-watched sports television network in ESPN, draws millions to its theme parks and cruise lines, and entertains millions more with animated and live-action films that bring our greatest fantasies to life. Revenue improved 9 percent in Disney's fiscal first quarter while operating profit zoomed 27 percent and diluted earnings per share jumped 34 percent. It's a superheroic stock if ever there was one, and that's before you count the influence of a new "Star Wars" film arriving in 2015. Your mom would be proud. Rating: Marry it!
Of course, this commitment comparison isn't perfect. Finding a date or a mate is bound to be more complex than choosing stocks for your (admittedly polyamorous) portfolio. And, if we're honest with ourselves, it's probably also fair to say that what we want most is a partner who'll love us and take care of us.
That said, describing what we want out of a great stock -- one that grows its profits and pays back shareholders with strong returns and fat dividends -- sounds a lot like what one gets when they find their Mr. or Ms. Right.
How are your portfolio relationships going? Do you have a love-hate relationship with your investments? Tell us your stories in the comments box below.
Motley Fool analyst Tim Beyers owns shares of Apple, Netflix, and Walt Disney. The Motley Fool recommends AMC Networks, Apple, Coach, Facebook, Michael Kors Holdings, Netflix, Take-Two Interactive, and Walt Disney. The Motley Fool owns shares of Apple, Coach, Facebook, Netflix, and Walt Disney. Try any of our newsletter services free for 30 days.