There's nothing more gratifying than seeing your child's face light up when you give him or her the perfect present for the holidays. Oh wait, yes, there is: Seeing them succeed their whole lives! And guess how you make that happen? You teach your kids about money and investing as young as possible, Jim Cramer said.
The earlier you start, the better off they will be. So this year, instead of buying your kid the hottest toy that's going to make her friends drool, consider giving the gift that could keep on giving — stocks! Here are Cramer’s 10 stocks for 2012 for kids under age 10, or under 100 for that matter!
Note: All of these stocks are great examples of those that could be held for several years. That doesn't mean you can afford to skip the homework. In fact, Cramer picked big names that kids are likely to recognize precisely because it makes the homework easier. If you want to educate your children about money and investing, these stocks are just what you're looking for.
By Drew Sandholm and Tom Brennan
Posted 12 December 2011
When this story was published, Cramer’s charitable trust owned Apple and Viacom.
Chances are Amazon.com is fresh on your mind because you've been buying many of your holiday gifts online. After all, this Seattle-based company is the world’s largest online retailer. Amazon also manufactures and sells the popular Kindle line of electronic reading devices. Last month, it released the Kindle Fire, a low-priced tablet that features a full color, multi-touch display.
Does your child want another iPod? Cramer’s kids do. And everyone wants the iPhone 4S and iPad2. Just tack on some shares of Apple’s stock to that gift. That’s the best way to play the smartphone revolution. The stock will certainly outlast the hits they're downloading from iTunes. It’s important to note there may be some near-term weakness on the stock, but it’s still a solid holding.
Why ConocoPhillips? Well, first of all you'd be crazy not to have an oil name in any truly diversified portfolio, Cramer says. Boasting a 3.6 percent dividend yield, COP offers yield protection, Cramer noted. Plus, he thinks the Houston-based company’s plans to break up will unlock considerable value for shareholders.
Where to start? Google is the reason your children don't use an encyclopedia, and this company's long-term growth story is far from finished, as more and more advertising dollars flow online. The Internet is a theme every investor should consider playing, and Google is among best stocks in that sector, Cramer says. He recommends buying shares on weakness.
Honeywell International is a double play on your child's future, Cramer says, because of its profit potential and its focus on delivering energy-efficient infrastructure to the U.S. The Morristown, N.J.-based company also has an aerospace segment, and Cramer says the aerospace industry is doing very well right now. CEO Dave Cote is another reason to like Honeywell because he has turned it into a leaner, meaner leader in the industrial sector.
Be it for the Thanksgiving Day parade or a recent trip to the mall, kids will likely recognize the Macy’s brand. Cramer is bullish on this New York-based retailer and its stock. CEO Terry Lundgren has put what Cramer calls a so–so retailer back on the map. Its stock pays a modest 1.2 percent dividend, but hey, that’s better than nothing.
Is there a parent who hasn't taken a child to McDonald's, if only for their clean bathrooms? When Cramer was growing up, the Golden Arches stood for bad food. Now, the menu has tons of healthy offerings. He considers MCD a stock for the ages, with a fabulous overseas business that's benefiting from the weak dollar. Despite Europe’s sovereign debt crisis, the company recently called out both France and Germany as two of its strongest markets. McDonald’s also has a history of paying a generous dividend that your kids can collect for years and years. It currently sports a 2.9 percent dividend yield. Plus, it's stock recently hit its all-time high, a positive sign for the stock.
Pepsico is another iconic brand that your child can't fail to recognize, Cramer says. Investors always want a food-and-beverage company in the portfolio as a defensive name, especially in this volatile market that is continually tied to Europe’s ongoing debt crisis. Pepsi, under the leadership of the great CEO Indra Nooyi, is one of the best. Its stock currently pays a juicy 3.2 percent dividend yield, too.
You simply can't get any more kid-friendly than Walt Disney, Cramer says. The diversified media company has strong fundamentals, but better yet, it recently increased its dividend. DIS currently sports a 1.6 percent dividend yield. But even if the only link your child can make is that they like the new Muppets movie – that's a start!
If you hand your kids the remote control, there’s a good chance they’ll turn the television to Nickelodeon. Entertainment content company Viacom owns and operates the popular children’s programming network, as well as more than 150 other channels and multiplatform properties, such as MTV, VH1 and Comedy Central. The New York-based company recently reported strong earnings results and announced a stock buyback program that Cramer thinks could be leading to the company to go private. Cramer also likes the stock’s 2 percent dividend yield.