The concept of returns is usually defined in terms of dividends and capital gains, but some blue-chip stocks go the extra mile. It’s likely that many investors could end up skipping right over the benefits they’ve accrued as loyal shareholders.
For the most part, shareholders benefit by investing in a company and seeing its stock appreciate over time. A handful of companies, however, offer discounts on their products to loyal shareholders.
Below are three blue-chip stocks that offer some of the best benefits to investors that purchase their shares.
One of these companies offers the largest and least capped of all the other shareholder benefits. A few of them require some upfront paperwork and preparation, but they’re ultimately worth it.
Blue-Chip Stocks With Hidden Perks: Carnival (CCL)
The perk declines to $100 for a cruise lasting between seven and 13 days, and is only $50 for a cruise of six days, or less. But it represents a nice perk that can certainly add up for the shareholder that also cruises at least annually.
The above credits apply to Carnival’s North American Cruise brands, including the namesake cruise line, Princess Cruises, Holland America and Seabourn. The company also offers perks for its Continental Europe (up to 200 euros), United Kingdom (up to 150 pounds) and Australian brands (up to 250 Australian dollars).
There doesn’t appear to be many restrictions, other than having to prove share ownership by faxing or mailing a brokerage statement (with the account number blacked out). The request must also be made at least two weeks prior to heading out to sea on the cruise. Finally, the funds can’t be used for gambling at the ship’s casino.
Prospective shareholders might be interested in this shareholder perk, and should also look at investing in the shares. Carnival’s stock has fallen well below $50 per share and trades at a forward price-earnings of only 12.5 — well below the 21.7 average over the past five years. The dividend yield of just under 3% is also appealing, and management has steadily boosted the dividend since 2010.
Blue-Chip Stocks With Hidden Perks: Ford (F)
Ford Motor Company (NYSE:F) offers shareholders a discount on its vehicles. The vehicle pricing privilege is referred to as the “X-Plan,” and although it doesn’t appear to be widely publicized (it isn’t mentioned on the company’s investor relations site), there is a form that shareholders can fill out to apply.
As with Carnival, Ford asks shareholders to send a copy of a brokerage or account statement to prove share ownership. The company will then create a personal identification number that can be shared with a local dealer to help obtain the discount on a vehicle purchase.
The request form suggests asking the dealer for a copy of the invoice to help ensure the proper discount was applied. No dollar amounts are mentioned, so at a minimum, the special pricing could be used to negotiate a lower overall price.
Ford looks to have the flexibility to deny X-Plan pricing on popular models, or those in short supply. But it states that most brands, including the namesake one, Mazda, Mercury and Lincoln brands, are included. One blog listed a company phone number to help ascertain what the current X-Plan details are.
Ford’s stock also looks quite appealing at current levels. The share price is hovering below $12 per share, or toward its lows over the past year. The forward price-earnings is only 7 and below Ford’s average earnings multiple of 9.3 over the past five years. It is also well below the market P/E of 24.6. Finally, the dividend yield of 5%-plus is high on an absolute basis and more than double the average market yield of 2.1%.
Blue-Chip Stocks With Hidden Perks: Berkshire Hathaway (BRK.B)
Shareholders that attend Berkshire Hathaway Inc.’s (NYSE:BRK.B, NYSE:BRK.A) annual shareholder meeting in Omaha the first weekend in May every year are very familiar with the discounts available to its investors. For the most part, the discount applies during the weekend of the meeting, but certain discounts persist throughout the year.
The discount applies to a number of the companies that Warren Buffett has cobbled together over the decades into the Berkshire conglomerate. Berkshire owns Geico insurance, for instance, which offers an 8% discount to those that purchase its auto insurance and own just a single share of BRK stock. This discount is known to be ongoing throughout the year.
Nebraska Furniture Mart, one of the largest retailers of furniture on the planet, also offers a shareholder discount. It applies during the weekend meeting and about a week overall. Borsheims is Berkshire’s jewelry retailer and also offers a similar discount over this same period.
Berkshire looks interesting as an investment, but there are a number of factors for long-term investors to consider. A transition plan is in place when they day comes that Warren Buffett is no longer willing or able to run the firm he created.
The company is also primarily an insurer, though it has a stable of world-class businesses in addition to its automobile, reinsurance and other insurance units. It’s price-to-book value is only 1.3, which is arguably too steep of a discount for one of the best collections of businesses on the planet.
As of this writing, Ryan Fuhrmann did not hold a position in any of the aforementioned securities.