Valentine’s Day falls on a Wednesday this year, not the most romantic day of the week but certainly better than Tuesday or Monday. According to the National Retail Federation’s annual survey, Americans will spend an average of $144 on Valentine’s Day, 5.1% higher than a year earlier.
Every year men scramble for something to buy their significant other that says “I care” without breaking the bank. After all, you’ve also got a birthday and Christmas to consider when drawing up the annual budget.
Favorite gifts include candy, cologne and flowers with a dinner reservation a nice added touch. And for those who want to spend a little more than a box of chocolates, go for it; according to the NRF, Americans will spend $4.7 billion this Valentine’s Day on a nice piece of jewelry.
However, for those of you who are more economically frugal, here are seven stocks to buy your spouse for Valentine’s Day that will definitely surprise them while providing for future Valentine’s Day gifts through capital appreciation.
Maybe not the most romantic gift, but these Valentine’s day stocks are a sensible one nonetheless.
Valentine’s Day Stocks to Buy Today: Berkshire Hathaway (BRK.B)
See’s Candies is one of the oldest holdings in the Berkshire Hathaway Inc. (NYSE:BRK.B) stable. Warren Buffett and Charlie Munger acquired the California boxed-candy business way back in 1972, long before Berkshire Hathaway became a household name with serious investors.
My recommendation is you buy your spouse a few of the Class B shares and a box of See’s Candies. They might not see it as a big deal now but if you bought Berkshire Hathaway stock back in 1972 — and still held them today — you wouldn’t be worrying about anything of a financial nature, I guarantee it.
Oh, and by the way, not only do you get See’s Candy in the bargain, but you also get a big chunk of Cadbury through Berkshire Hathaway’s 27% stake in Kraft Heinz Co (NYSE:KHC).
Candy and chocolate might be a small part of the Berkshire Hathaway empire, but it’s an essential part of its history.
Valentine’s Day Stocks to Buy Today: Tiffany (TIF)
There’s a good chance that Tiffany & Co. (NYSE:TIF) will snag the lion’s share of the $4.7 billion Americans will spend on jewelry this Valentine’s.
The company, best known for its pale blue gift box and pricey jewelry, has evolved in recent years, selling more lower-priced everyday items and less diamond engagement rings.
Like many retailers, it hasn’t always been a piece of cake for Tiffany. If you bought its stock this time three years ago, you’d have about the same amount in your brokerage account today, which pales in comparison to the S&P 500, up almost 11% in the same period.
Tiffany hired a top-notch CEO in October — Alessandro Bogliolo, who’s worked as an executive at Diesel and Bulgari over the past 20 years — and holiday same-store sales grew by a healthy 5%, suggesting now is the time to get back on the Tiffany bandwagon.
Valentine’s Day Stocks to Buy Today: FedEx (FDX)
The company flies freshly-cut flowers from Latin America to Miami International and then to major cities across the U.S. in less than two days. If you’re reading this and haven’t ordered flowers for the big day, not even UPS might be able to save you.
While it’s nice PR for UPS, as companies go, FedEx Corporation (NYSE:FDX) is a much better stock to own for the long term. Over the past 15 years, it’s averaged an annualized total return of 11%, more than 500 basis points greater than UPS.
The one fly in the ointment could be the new shipping service being tested by Amazon.com, Inc. (NASDAQ:AMZN) that will see it pick up products from its third-party sellers to speed up the delivery process while providing greater logistical control of shipments to customers.
If successful, Amazon could take on FedEx and UPS when it comes to the final mile.
That said, I still think FedEx has enough going on to weather any potential uncertainty from Amazon.
Valentine’s Day Stocks to Buy Today: Ferrari (RACE)
While most guys and gals probably won’t be buying their spouses expensive cars this Valentine’s Day, Ferrari NV (NYSE:RACE) is the next best way to tell your loved one you understand their passion for fast cars.
And, there’s an added benefit; this gift will make you money rather than spending time in the shop.
In the fiscal year ended December 31, 2017, Ferrari delivered more than enough earnings power — 1.0 billion euros in adjusted EBITDA (up 18% on the year) on revenues of 3.4 billion — to justify a forward P/E of 33.
How many car companies have a 30% net margin? By comparison, Ford Motor Company’s (NYSE:F) is around 8%.
Given the financial strength of Ferrari, not to mention its hold on the luxury sports car market, it’s easy to see why its stock is up 136% since going public in October 2015.
If your special someone likes sports cars, a few shares of Big Red will get their motor running.
Valentine’s Day Stocks to Buy Today: 1-800-Flowers.com (FLWS)
If you were planning to buy your spouse some flowers for Valentine’s Day, good on you. However, if you want to make your spouse some money, buying a few shares of 1-800-Flowers.com Inc (NASDAQ:FLWS) might not be a bad idea as well.
FLWS has made an excellent run since the markets bottomed in March 2009, up 716%.
What’s changed at the flower and gift emporium?
For starters, it brings more than flowers to the table with brands such as Harry & David, The Popcorn Factory and Stock Yards to complement its legacy 1-800-Flowers brand.
More importantly, it’s making bigger profits than it’s made at any time in the past decade — it expects to earn at least $0.62 a share in fiscal 2018, considerably higher than the $0.46 a share guidance at the beginning of its fiscal year — a sign that its business model isn’t nearly as outdated as some might believe.
Add to this a valuation that’s more attractive than at any time in the past decade — it’s got a trailing 12-month P/E ratio of 13.3, about half its five-year average — and you’ve got yourself an excellent investment for the next 2-3 years.
Valentine’s Day Stocks to Buy Today: LVMH (LVMUY)
Just as you probably aren’t going to buy your spouse a Ferrari for Valentine’s Day, you’re not likely to splurge for a Louis Vuitton bag, but you might consider shares of LVMH Moet Hennessy Louis Vuitton SA (OTCMKTS:LVMUY), the Paris luxury-brand conglomerate controlled by CEO Bernard Arnault.
Whether you’re a man or a woman buying for your significant other, LVMH has something for everyone. With over 70 brands known to consumers around the world, the company generated revenues of 43 billion in 2017, making it the number one owner of luxury brands anywhere.
In the past two years alone, LVMHs net profits have grown by 44% to 5.1 billion euros in 2017, from 3.6 billion euros in 2015. In those two years, LVMH upped its operating profit margin by 100 basis points to 19.5%, higher than Lululemon Athletica Inc. (NASDAQ:LULU), known for having one of the highest operating margins in retail.
Bottom line: If you want to impress your spouse with both your knowledge of the good things in life and your knowledge of investments, LVMH is the way to go on Feb. 14.
Valentine’s Day Stocks to Buy Today: Marriott Vacations (VAC)
By now I probably sound like a broken record, but unless you were already planning to buy a timeshare for you and your spouse, a cheaper alternative is to buy shares in one of the world’s leading vacation ownership companies.
Marriott Vacations Worldwide Corp (NYSE:VAC) was spun off from its former parent, Marriott International Inc. (NYSE:MAR), in November 2011; MAR shareholders received one share of VAC for every ten shares held of the parent. The Marriott family own just less than 17% of both companies.
Shareholders of Marriott International who held on to their VAC shares received in the 2011 spinoff have achieved a 667% cumulative return over the past six years, an extremely impressive return compared to the S&P 500.
Marriott Vacations Worldwide was affected by the three major hurricanes in 2017. The company estimates that the full-year cost will be approximately an $8.3 million hit to the bottom line.
However, it’s still going to be an outstanding year for the vacation ownership company with adjusted earnings of at least $5.30 per share. Forget the vacation and buy the vacation stock. You’ll be further ahead.
As of this writing, Will Ashworth did not hold a position in any of the aforementioned securities.