The next time you go birthday or holiday shopping, why not give a stock as a gift? In this segment of Backstage Pass, recorded on Dec. 17, 2021, Fool contributors Toby Bordelon, Jason Hall, and Rachel Warren discuss the growing popularity of gifting stocks and Jason shares the top stocks he would choose as gifts.
Toby Bordelon: It's a little bit encouraging to see this according to a survey from MagnifyMoney, CNBC had this article on the website. As many as 65% of Americans want financial assets as a gift this year.
We're talking things like stock or crypto, stuff like that. My question for you guys is, what do you think is behind this idea? And then if you're going to give someone, if you're going to get them to stocks to invest, I'm going to get you some stock.
What company would you give to an investor and break it down for me, let's do two. Let's do one company you can give to a new adult investor, and maybe one company you can give to a young kid starting out. Maybe your own niece or nephew, maybe your kid, whatever. Jason.
Jason Hall: So two-thirds of Americans don't want investments or gifts. [laughs] Let me tell you a story about the politician and the pollster. The politician was anxious, and he wasn't really sure what they should be asking his constituents.
Pollster put his arm around him and said, "Son, it's pretty easy. What answers do you want?" I think this is the case. I really do. I think it's the case of how MagnifyMoney framed these questions. They probably led with, "Do you want investments for a Christmas present?"
They planted that seed to get the answer they wanted. It's like, "Oh, yeah. Of course, I do." It's nonsense. It's quiet in the news cycle, and they just wanted to get news, but I love the idea. I really do. I think it's great, it really is, because how much junk do we get and do we give that we don't remember who gave it to us?
We don't really need it or use it. I love the idea of giving something to somebody meaningful that could actually impact them for a long time. You got to be careful with kids though. I hope I don't step on any toes guys, e honestly, I didn't see what you guys are going to recommend. I don't think you have to give a kid Disney or Mattel. You don't have to give a kid a stock that's toys or videos, You really don't have to.
Rachel Warren: I almost went with Disney, but I didn't.
Hall: I was thinking that too, but I'm like, "No, that's lazy. I'm not going to do that." [laughs] Toby, I hope I'm not calling you lazy there, buddy.
I start thinking about it and it's like OK, so for kids, by the time the kids are really old enough to start really internalizing, investing in ownership of a company, that sort of thing, they're going to be thinking about the world a little bit more broadly.
I think about a problem, this is like a generational issue that younger people seem to really understand at a fundamental way that's been really important for them, and that's climate change. I think about that.
Surveys of younger people, this is something that is commonly one of the top two things they say is the most important things that their generation is going to be facing. It makes me thinking about buying shares of a company like Clearway Energy (CWEN 0.30%) (CWEN.A 0.25%), for example, which sounds like it's the most boring thing, and you know what it is boring, and that's totally fine. But you know what happens when you buy shares of Clearway Energy for a kid?
Every time you drive past one of those solar farms that are turning up everywhere now, you see them in just about every state, even if it's just a few acres or you're out in the Midwest or you're in the West and you see wind turbines.
You know what you can say to that kid? "Hey, you own a piece of that. That's what you're doing, and you're going to make money from a thing that's making the world a better place."
I think that is so powerful to be able to do that for a young person and plant the idea of what investing really is, buying stocks really is and counter so much of that idea that it's gambling and you have to trade and all of those things, and you talk about something durable and long-lasting.
For an adult, I like the idea of something that maybe they use a lot and maybe never even realize it. A company that came to mind for me is Store Capital (STOR +0.00%), ticker is S-T-O-R. Store Capital is one of the larger real estate investment trusts that owns properties that are like e-commerce, they're experiential locations, that kind of thing. E-commerce resistant retail, I said e-commerce. E-commerce resistant retail experiential, that kind of thing.
Here's their 10 largest customers: LBM Holdings is a building materials company. That's not something that Amazon, watch Amazon somehow get into that business too. There's not a lot of pressure on a building materials company from e-commerce. Camping World, this is RVs, Bass Pro Shops.
A lot of these are big destination retailers, but even the ones that you might be worried about like AMC or Ashley HomeStore, which sells furniture that we've seen like Wayfair do well here, they're like a tiny portion of its rents. It's a really interesting, compelling story, and it's a great example of the behind the scenes, you don't even realize it's there, but then it's like, "Wow, this is pretty important."
Dividend yield is higher right now than it was in 2019. Great business. Really great business.
