Stocks for Mom: The Mama Screen

The Motley Fool crew is no ship of fools. We're putting Mom first, and so should you. Check out all of the Fool's Mother's Day articles.

I'm sure your Mom loves the chocolates you usually get her on Mother's Day, along with the flowers (her favorites) and the card with the official Hallmark seal. Unfortunately, while thoughtful, chocolates and flowers don't last. Chocolates get eaten. Flowers wilt. Greeting cards? Sure, they're lovely and all, but they'll probably end up resting in a scrapbook your Mom only breaks out on, yep, Mother's Day.

This year, get your Mom something that mirrors her love for you: a dividend-paying stock. Like Mom's love, a healthy dividend-paying stock is the gift that keeps on giving.

Loving child that you are, you want to find a stock that demonstrates the traits that your Mom personifies -- strength, experience, and patience. Based on this, and my thoughts on my own mother, I've developed The Mama Screen to help us search for the best stocks for all our Moms.

Here's what we're looking for:

  • Strength -- If your Mom is like mine, then you'll want a stock that is always able to make the most of any situation. Much like Mom has a high love/size ratio, let's only consider companies that make the most (income) of what they've got (equity). Only returns on equity above 15% will do for Foolish Moms.
  • Experience -- Mom taught you how to bait a hook (those poor worms), do your laundry, and cook something other than mac & cheese. Moms can do everything, and they've been doing just that for a long time. Just like how your Mom has a PhD in Momology, you should get her a stock that has been through a lot, but still keeps dishing out the love -- dividend love, that is. Get Mom a stock with a dividend yield above the market average of 1.9%.
  • Patience -- Remember that time you spilled juice on the carpet? Your Dad would have whupped your butt, but your Mom patiently cleaned it up while you had already gone back to doing whatever it was that a hell-child like you did for kicks. Moms are high on patience and not easily unsettled. Moms, like their stocks, should exhibit low volatility. Here, we're looking for a beta below 0.8.

And what did we find? These seven companies all make the grade with The Mama Screen:

Company

5-Year Returns on Equity

Dividend Yield

Beta

Johnson & Johnson (NYSE: JNJ  )

28.4%

2.6%

0.3

3M Co. (NYSE: MMM  )

33.3%

2.3%

0.7

Procter & Gamble (NYSE: PG  )

32.1%

2.3%

0.2

United Parcel Service (NYSE: UPS  )

23.9%

2.4%

0.5

Diageo (NYSE: DEO  )

34.8%

2.3%

0.1

Coca-Cola (NYSE: KO  )

32.0%

2.6%

0.6

Abbott Laboratories (NYSE: ABT  )

20.8%

2.3%

0.4

So which is the right stock for your Mom? Well, if your Mom is a jack-of-all-trades, consider 3M. If she's unfailingly consistent and always delivers when you need her, go with UPS. Brimming with creativity? She'll appreciate Abbott Labs.

For me, though, the most fitting stock for my mother is, without a doubt, Coca-Cola. Both Coke and my Mom are Atlanta staples, have rock-solid brand names, enviable track records, and, of course, are just as sweet as can be.

UPS, Diageo, and Johnson & Johnson are Motley Fool Income Investor picks, while Coke and 3M are Inside Value picks. You can take a free trial of either service without any obligation to buy.

Foolish Editor Joe Magyer's mom, all 4'8" of her, was pulled from a powder puff football game in high school for unnecessary roughness. No, seriously. Joe does not own any stocks mentioned in this article. The Fool's disclosure policy is always sad on Mother's Day, as it never knew its mother.


Read/Post Comments (0) | Recommend This Article (21)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 527604, ~/Articles/ArticleHandler.aspx, 11/27/2014 12:43:40 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement