Google the words “Thanksgiving Stocks to Buy” and you get 1.34 million results. Now, Google the words “Retail Stocks to Buy” and you get 1.71 million results.
Frankly, I thought the difference between the two would have been much higher. I guess when most investors search for Thanksgiving stocks, they’re assuming most of the results will be retail businesses benefiting from Black Friday.
However, with Black Friday becoming less relevant, thanks in part to online shopping, the Thanksgiving stocks to buy in the future will be less about retail and more about experiences.
“The whole idea of Black Friday and Cyber Monday … is becoming less relevant as the consumer is generally accustomed to great deals, or at least getting a deal,” Nasdaq Advisory Services analyst Josh Elman said recently. “While it still is very important in the grand scheme of things, I do think retailers have been adjusting.”
There might be a Santa Claus rally this December, but if you’re expecting retail stocks to lead the pack, you might be very sorry.
Not to worry. These seven Thanksgiving stocks to buy will do just fine heading into the holidays.
Thanksgiving Stocks to Buy: Delta Air Lines (DAL)
Before you can unwrap the turkey and stick it in the oven, you first have to get to your final destination. Experts are suggesting that Turkey Weekend 2017 could be the busiest holiday in a decade.
Airlines for America (A4A) projects that 28.5 million passengers will fly over the 12-day traditional travel period with Sunday, Nov. 26, the busiest with 2.9 million people catching flights home.
Airlines will be direct beneficiaries of this travel.
Looking at the country’s biggest in terms of annual revenue and market cap, Delta Air Lines, Inc. (NYSE:DAL) is also one of the least expensive stocks with a price-to-sales ratio of 0.90, a much lower multiple than its low-cost competitors.
“Delta is benefiting from low fuel costs, pricing power and improving international results,” stated TipRanks’ Harriet Lefton on Nov. 17. “According to Bloomberg sources, Delta is now about to order 100 single-aisle jets worth up to $12.7 billion from either Boeing or Airbus.
It has been a so-so year for the big airlines. Thanksgiving 2017 could turn that into a good year.
Thanksgiving Stocks to Buy: Anheuser Busch InBev (BUD)
Once you’ve arrived at your destination and put away your bags and such, it’s time to get the holiday started with a few adult beverages.
No one makes more beer — some of it even good — around the world than Anheuser Busch InBev NV (ADR) (NYSE:BUD), the King of Beers. No longer in the hands of Americans, it’s still okay to hoist a Budweiser while watching football on Thanksgiving Day.
The problem for BUD stock at Thanksgiving is that many choosing beer this year will be electing to quaff a craft beer — 60% of those drinking beer — but despite the trend to Americans consuming better alcohol at Thanksgiving, the remaining 40% will include a lot of BUD-related brands.
“Most people enjoy around 3 to 5 drinks over the course of the celebration (only 8 percent said they lose count of how many drinks they have), so if you plan to drink this Thanksgiving, doing so responsibly is the most festive choice,” according to Food and Wine magazine.
Will Thanksgiving make a dent in BUD’s annual revenues? I doubt it, but a good showing can’t hurt. Up 9% year to date, BUD stock needs to step up the pace this holiday if it hopes to catch the S&P 500.
Thanksgiving Stocks to Buy: Constellation Brands (STZ)
All it took was a $245 million investment in Canopy Growth Corp (OTCMKTS:TWMJF), one of Canada’s largest producers of medical marijuana with a market cap of $2.7 billion, to send marijuana stocks into the stratosphere. Constellation Brands, Inc. (NYSE:STZ) was buying 9.9% of Canopy Growth’s stock.
More importantly, Constellation is going to work with Canopy Growth to develop cannabis-based drinks for its customers who already purchase wine, beer and spirits made by the company.
“Canopy Growth has a seasoned leadership team that understands the legal, regulatory and economic landscape for an emerging market that is predicted to become a significant consumer category in the future,” said Constellation chief executive Rob Sands, in a statement discussing its investment.
In states like Colorado where recreational use is legal, cannabis-based drinks are booming. By working with Canopy Growth, Constellation goes from a triple threat (beer, wine, spirits) to a quadruple threat.
You won’t be able to buy Constellation Brands’ cannabis drinks this Thanksgiving holiday but come this time next year, you can bet shareholders will be very happy about its little $245 million investment.
Thanksgiving Stocks to Buy: Comcast (CMCSA)
Macy’s Inc (NYSE:M) might not be doing as well as it once did in the retail arena but every year it puts on its Sunday best and delivers a fantastic Thanksgiving Day Parade in New York City.
Before sitting down to football and a little turkey, millions of Americans watch the parade live in NYC and on NBC, Comcast Corporation’s (NASDAQ:CMCSA) television broadcasting subsidiary.
It’s a marketer’s dream-advertising vehicle. In 2015, it’s estimated the parade generated $40 million in revenue.
“It is one of our most sought after assets in our portfolio, and not just because of its proximity to the start of holiday shopping,” said Alison Tarrant, executive vice president for client partnerships, NBCUniversal. “It’s also the emotional connection that consumers have with the parade and the start of the holiday season.”
Even though I’m Canadian, ever since I saw Miracle on 34th Street on television as a kid, the Macy’s Thanksgiving Day Parade’s been a must-watch to get the holidays off to a great start.
NBC covets this broadcast — rightly so — which is why the Today Show team of Matt Lauer, Savannah Guthrie and Al Roker handle the announcing duties.
Ho, Ho, Ho.
Thanksgiving Stocks to Buy: Darden Restaurants (DRI)
Not everybody wants to cook on Thanksgiving Day.
If you’re in this large group of people, Darden Restaurants, Inc. (NYSE:DRI) has a dining option for every price point, from the high-end Eddie V’s with an average check of $93 to Olive Garden at $18 and Seasons 52 in the middle at $45.
Don’t like any of those? You can also go to Yard House or one of its other four concepts.
The trend of eating out is growing, according to the National Restaurant Association (NRA), which estimates that 9% of Americans will eat out on Thanksgiving Day, up from 6% in 2011.
Those most likely to partake in a Thanksgiving Day dining excursion are those people also planning to hit the malls.
“Forty-three percent of adults say they plan to go out shopping on Thanksgiving Day or the Friday after Thanksgiving, also known as Black Friday,” said the NRA about its annual Thanksgiving dining survey. “Of the respondents who said they plan to go out shopping on Thanksgiving Day or Black Friday this year, 72 percent said they expect that they will visit a restaurant or fast food place while they are out shopping.”
The only downer for Darden shareholders is that most of the people planning to dine out will go to a place they already frequent, meaning that it won’t be generating too many new customers this Thanksgiving.
Thanksgiving Stocks to Buy: Walt Disney (DIS)
Just as not everyone is going to cook a turkey dinner this Thanksgiving, not everyone is going to stay with friends or family. Some are going to go to a resort where they don’t know anybody and the usual family holiday arguments are a million miles away.
This Thanksgiving, Walt Disney Co (NYSE:DIS) is going to be looking to recoup some of the $100 million it lost shutting Walt Disney World for two days and cancelling three cruises and shortening two others in September as a result of Hurricane Irma.
Never mind the short-term glitch in Florida, Disney’s Parks and Resorts are the company’s growth engine with revenues and operating profits up 8% and 14% respectively for the entire fiscal year ended September 30, 2017.
“Thanksgiving week is a different story, as it spikes crowds tremendously; this entire week through the Saturday after Thanksgiving is one of the busiest times of the year at Walt Disney World,” suggests the Disney Tourist Blog. “It’s still not as busy as Christmas or New Year’s Eve, but it’s quite busy.”
Expect near-record numbers at Walt Disney World this year; that’s great news for CEO Bob Iger who probably can’t remember a worse fiscal year in his tenure as boss.
Thanksgiving Stocks to Buy: Seaboard Corp. (SEB)
What would Thanksgiving be without the traditional turkey dinner? Not the country’s biggest holiday, that’s for sure.
If you’re unfamiliar with Seaboard Corp (NYSEAMERICAN:SEB), it’s a Kansas-based conglomerate that focus on food- and transportation-related businesses in the U.S. and internationally.
However, it is the company’s 50% interest in Butterball LLC that benefits most directly from the annual food binge. Each year, Butterball produces over 1 billion turkeys, a lot of it eaten at Thanksgiving.
Every holiday, Butterball opens its Turkey Talk-Line to handle more than a million calls from concerned Americans across the country.
In July, I called Seaboard one of the best buy-and-hold stocks to buy; since then it’s up just 3%. Over the past 15 years through November 20, it has got an annual total return of 22%, more than double Berkshire Hathaway Inc. (NYSE:BRK.A, NYSE:BRK.B).
At $4,285 a share, you might want to buy a Butterball instead, but if you can stomach a four-digit share price, I say buy away.
Happy Thanksgiving! Gobble, Gobble, Gobble.
As of this writing, Will Ashworth did not hold a position in any of the aforementioned securities.