Graduation season is coming up. So is Father’s Day. If you’re looking for a gift that’s refined, mature and valuable, the very best choice might be the one thing you can’t buy on Amazon — right now or for any occasion. Instead of an engraved trinket that will wind up in a shoebox, how about an investment in the recipient’s future in the form of an ownership stake in a publicly traded company?
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The gift of stock is as old as the stock market itself. For a new graduate who has never invested, it could plant a seed. For an aging father who is cruising toward retirement, it could join a portfolio of stocks where there’s always room for one more.
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Either way, a few shares of company stock is a classy and elegant alternative to physical merchandise. Even better, the right stock can be a golden goose that continues to bring good fortune — maybe forever.
Last updated: May 26, 2021
It’s true that Ford stock is a little pricey right now because the debut of the long-anticipated fully electric F-150 was impressive beyond expectations — but that’s exactly why it’s worth buying. The F-150 has been the bestselling vehicle in America for more than 40 years. Its arrival as an EV positions Ford at the forefront of the electric revolution. Stocks like Ford — iconic American companies from the golden age of industry — have been go-to gift stocks for generations. There’s no reason that another generation shouldn’t take the mantle as the company switches gears toward an emissions-free future.
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Amazon’s lineage doesn’t trace back to the Model T, but Jeff Bezos did the same thing as Henry Ford — dug in early for an ownership stake in the coming century. With the exception of maybe Google, Amazon did more than any other company to invent the new world that brands like Ford were forced to adapt to if they wanted to stay alive.
Amazon continues to innovate, expand and dominate nearly every segment of the economy it touches. It’s not hard to find credible analysts who believe that Amazon’s market cap will hit $3 trillion in the next few years, up from about $1.64 trillion now. That makes it a gift worth giving on any occasion.
S&P 500 Dividend Aristocrats ETF (NOBL)
The Dividend Aristocrats are a group of stocks — there are currently 65 — that represent the cream of the S&P 500 crop. In order to get a spot on the list, a company has to raise its dividend every year for at least 25 years — through downturns, recessions, scandals, whatever.
Only the most stable, best managed, least volatile, and richest companies in the world can achieve such a feat. If a company lets its dividend slip for even a single year, it’s off the list for at least a quarter-century. You used to have to buy them all a la carte, but now, of course, there’s an ETF. For a very doable expense ratio of .35%, the NOBL ETF lets you give the gift of stock market royalty.
Of the 65 Dividend Aristocrats, one stands out above all others as the greatest American dividend stock on the market: AT&T. Its yield is around 7%, which is excellent even by the standards of top-shelf dividend stocks. Even beyond the income potential, AT&T — like Ford — has been a standard gift stock for generations.
The company is an American icon that was directly tied to the country’s rise as a superpower and its shareholders have enjoyed a long run of corporate stability. But also like Ford, it’s not a purely nostalgic selection by any means. Just as Ford rose to meet the challenges of the 21st century with the electric F-150, AT&T is currently at the forefront of the national rollout of 5G.
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Global X Thematic Growth ETF (GXTG)
If you’re into ETFs but you’re not familiar with Global X, the company has cooked up some of the coolest funds on the market. Their themes allow investors to put their money into the trendiest trends of the day.
There are a lot of options, but if you can only give just one share as a gift, Global X makes it easy — if you’re looking for something a little more exciting than Ford or AT&T, that is. The Global X Thematic Growth stock combines seven of the company’s hottest ETFs into one super-ETF: Fintech, cloud computing, genomics and biotechnology, robotics and artificial intelligence, lithium and battery tech, social media and cannabis.
IQ Candriam ESG US Equity ETF (IQSU)
If you’re giving the gift of stock to someone who invests according to their principles or politics, funds with social responsibility themes are springing up all over. The problem is, ETFs that meet the environmental, social and governance (ESG) standards set by organizations like Candriam tend to be expensive — very expensive, in a lot of cases. With an expense ratio of 0.09%, IQSU stands out by delivering ESG-style ethical investing for only single-digit basis points.
Disney is an icon like Ford and AT&T, but it endures for a different reason. Disney’s real magic is in its vast, sprawling network of subsidiaries. COVID-19 crushed Disney’s core business by shutting down its world-famous theme parks and canceling its cruises. But a lot of those people stayed home and subscribed to Disney+ instead.
If you watch TV, you almost certainly kick money up to Disney whether you mean to or not. It owns the ESPN franchise, A&E, the History Channel, Lifetime, ABC, FX, Fox, National Geographic and all the stations, channels, subsidiaries and companies that they own, as well — not to mention Marvel and Star Wars. Although it’s currently down from its March highs, Disney is doing just fine despite a year without the House of Mouse.
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Madison Square Garden Sports Corp. (MSGS)
In the U.S., it’s not easy to invest in a pro sports team — much less two of America’s most storied athletic franchises at the same time. A share of MSGS, however, lets you give exactly that gift. The stock emerged in 2020 when the Madison Square Garden Company spun off its entertainment division and became Madison Square Garden Sports Corp. It — and your gift recipient, should you be so kind — owns both the New York Rangers and the New York Knicks.
Union Pacific Corp. (UPC)
Not a single company on this list would be what it is today if not for railroads. Warren Buffett shocked the world by making massive, billion-dollar investments in railroads at the height of the financial crisis in 2009. His logic? Trains remain the backbone of the American consumer economy and enjoy major financial and environmental advantages over trucking, the rail industry’s chief competitor.
One decade and one crisis later, trains proved more relevant than ever during COVID-19. Their stocks were tucked inside of popular transportation ETFs that emerged as some of the pandemic’s biggest winners. Train stocks can be good investments, but they can also be great gifts for the same reason as Ford, Disney, and the rest — to own a share is to own a piece of American history.
No brand on the planet is more familiar in more places than Coca-Cola, which is probably the most popular gift stock gift of all time, although that could never be quantified. It has the legacy, pedigree and icon status of Ford, the festive and innocent fun of Disney, and although it doesn’t deliver 7% like AT&T, Coca-Cola’s dividend is a hefty 3.2% — more than double the S&P 500 average of 1.5%. In fact, Coca-Cola is a Dividend Aristocrat — scratch that, a Dividend King. Dividend Kings are an even rarer and smaller group of stocks that have increased their shareholder dividend every year for an incredible 50 years straight. Coca-Cola is now and has always been the great all-American gift stock.
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