This weekend marks my 14th Father's Day. Our eldest enters high school in the fall; our youngest will be in fourth grade. And our little girl? She isn't as little as she used to be.
I'm hardly alone, of course. Millions of dads across the U.S. will be celebrating with their kids this weekend. Amid the ties and pancake breakfasts is a lost opportunity. Don't waste precious dollars buying throwaway gifts! Instead, opt for a gift that keeps on giving. Why not buy Dad shares in the businesses that make the stuff he truly loves?
Here are four top stocks that cater to all sorts of Dads:
1. Under Armour (NYSE:UAA). For the outdoorsy Dad. No longer an upstart maker of sportswear, Under Armour is now a fast-growing supplier of apparel and footwear. Growth has followed. Revenue soared 36% to $642 million in the first quarter, easily beating expectations. Accessories revenue grew even more -- 42% -- to $52 million. Best of all, international revenue zoomed 79%. We could see years of similar gains. Foreign territories accounted for just 4% of overall sales as of the end of 2013. Meaningful expansion into new territories could boost that ratio and bring a whole new era growth.
What Dad should do now: While Nike accounts for 10 times as much revenue, Under Armour is growing roughly eight times faster. The market is pricing UA at precisely the premium it deserves. Buy to hold for a decade or more.
2. Walt Disney (NYSE:DIS). For the Dad who still acts like a kid sometimes. You know the brands, but you might not know just how valuable they've become. Each of the last four movies in the Marvel Cinematic Universe has earned more than $600 million worldwide, setting a new standard for the superhero genre. Star Wars: Episode VII is generating buzz more than a year before its release; $2 billion at the box office seems likely. And don't forget Frozen, another billion-dollar picture that's also the top-grossing animated movie of all time. These and other brands will help the House of Mouse cash in via licensed products and theme park rides, among other things.
What Dad should do now: While Disney isn't cheap at 20 times estimated earnings, analysts expect 16% annualized profit growth over the next five years. That's not much of a delta, especially for one of the world's great entertainment brands. Buy to hold for the long term and reinvest the annual dividend.
3. Lowe's (NYSE:LOW). For the handy-Dad. Lowe's, like Home Depot, is a home improvement center that's been struggling to improve results in recent quarters. Revenue grew 2% to $13.4 billion in the most recent quarter but still fell short of analyst expectations. Meanwhile, The Home Depot has been producing much higher levels of organic growth. Yet the smart-home movement may be giving Lowe's an advantage. The company's Iris kit for plugging into and connecting smart-home systems earned raves at this year's CES in Las Vegas and could grow into a catalyst for the stock.
What Dad should do now: Lowe's trades for less than half the market value of Home Depot despite accounting for just 30% less revenue. What's more, analysts see both companies growing at roughly the same pace over the next five years. Don't expect the disparity to last forever; buy for the long term and reinvest dividends.
4. Ford Motor (NYSE:F). For the Dad who likes to spend time in the garage. Like Disney, Ford is the home to some of the auto industry's most popular brands. The Mustang remains my personal favorite, and a new version dominated the headlines at the New York Auto Show. Recent revenue growth hasn't been as impressive as investors might like, but with 23 new models coming this year and a strong presence in China there's reason to believe Ford can be a stock for the long run.
What Dad should do now: Like its cars, Ford's 2.90% dividend yield offers plenty of horsepower. In fact, the company boosted its quarterly dividend 25% in January. Meanwhile, at 12.8 times estimated earnings, the stock is priced about in line with Wall Street's expectations for future growth, a decent price for a business that's likely to be around for a while.
Which stock you choose isn't really the point. In itself, the act of investing is a step toward financial freedom. That's the best gift of all -- for Dad or anyone else.