One of the reasons for a lack of much posting has been the birth of our first child, a healthy baby boy. And what better way to start him out than to purchase his first shares of stock because setting your children up for the future is the best thing you could possibly do for them.
I opened a portfolio and purchased stock in three companies that I think have been beaten down lately and offer not only fair value but decent dividends as well.
The first company is of course, Carter’s, CRI. Maybe you’ve heard of Carters or Osh Kosh B’Gosh? If not then you don’t have any kids. These brands dominate the baby clothing category. Carters stock is sitting near $85/share down from over $110/share as a 52-week high. Shares yield nearly 1.8% with a low payout ratio of 27%. They are a dividend challenger, having paid increased dividends for 5 straight years! They also just purchases another company called Skip Hop that should add additional profits to the bottom line. CFRA (formerly S&P Capital IQ) currently rates them a 4-star buy with a 3-year CAGR of 16%.
This next stock is currently a 5-Star screaming buy from Morningstar. It’s one of only 9 stocks currently ranked 5-stars. Everyone knows and has purchased this brand, Hanes! Hanes owns Hanes brands obviously which is better known for their underwear and Michael Jordan commercials, they also own Champion, Bali and Playtex to name a few. The great thing about Hanes is that their brands are everywhere and they don’t need their own retail footprint. They sell mainly online and through major department stores. You’ll even find their stuff on Amazon. The stock is rated a 3-star buy from CFRA with a 3-year CAGR of 17%. HBI currently yields 2.6% with an extremely low payout of 10%. They are also a dividend challenger, having paid out higher dividends for 5 straight years.
Now this third stock is probably more well known within the DGI community as a popular stock. It also has a much larger market cap in comparison. The stock is Disney. DIS currently yields 1.5% and is a dividend challenger. They have paid higher dividends for 7 straight years. Morningstar gives them a 4-star raiting as well as CFRA.
I’ve purchased equal dollar amount in these three stocks and plan to make small contributions to the account on a weekly basis. I’ll be tracking the performance and adding new position or dollar-cost-averaging in current ones.
I thought what better way to teach a child dividend growth investing than to purchase stock in companies that he uses products from. The retail sector has taken a beating lately and I figured I’d pick up a couple stocks there that I believe will still be around when my son goes to college. These stocks have been added to my portfolio tab for tracking purposes.
Congratulations on the new addition to your family! And glad to hear your son is going to be on sound financial footing. Those are some great stocks, and I’m going to take a closer look at Hanes in particular as a potential investment idea. Thanks again for the update and all the best to you and your growing family!
Jay recently posted…Trend Following Trade Ideas for June 2017 (Part 2)
Hi Jay,
Thank you! He’s a blessing and I wanted to start him out on the right foot. Hanes looks compelling, it’s worth a look for sure. I like the fact they don’t depend on a lot of brick and mortar store.
Thanks for stopping by!
Congratulations on your first baby and welcome back!! I am liking HBI and CRI. I am actually interested in buying HBI since that what I mostly wear!
Hi FiscalVoyage,
Thank you so much! I hope I can start writing a little more now that the baby is getting a little older. I like HBI , the product, and the stock looks enticing also at these levels. I think it could be a good long term bet.
Cheers!
Best wishes to your family. I had baby DivHut about 2 years ago and it has been a great adventure, especially as a stay at home dad. Enjoy this time with your baby and congrats on starting a portfolio from birth. It’s one of the best things you can do for a child as a new parent. Take advantage of their greatest asset, time. Thanks for sharing this happy news.
DivHut recently posted…The Four Mental Hurdles Every New Investor Needs to Overcome
DH,
Things changed after having a baby. I just want the best for him. Congratulations on your 2-year-old. They are a joy to have but a lot of hard work lol. I wanted to get him started at a young age and be able to start explaining investing to him.
Thank you for stopping by!
A family member of mine is about to have a baby within the next couple weeks. I want to welcome that baby into the world with a financial gift. Cash? Yeah right, cash is an awful long term investment with inflation. Bonds? No thanks, have you seen their pitiful yields? Stocks? Yes! I’m a stock jock at heart. I could select a low cost index fund but I want to roll the dice, life is about chances and beating odds. Plus there is an opportunity to teach him about investing along the way. Baby is getting his first stock.
Lisa @ NatureImmerse recently posted…Best Kayak Cart Reviews 2017
Hi Lisa,
What a wonderful gift you are giving that baby. It’s something that can appreciate in value his whole life. You are right about banks abysmal rates, not even close to inflation. I’m anxious to see what stock you do choose.
Thank you for sharing!
Congratulations on your first child! How exciting. And it only seems fitting that you are buying a stock that you and many others in your family are going to be supporting like crazy for the next few years. I’m also looking into HBI, love the brands.
Take care!
Bert
Bert,
Thank you! I wanted to buy some stocks in companies that the baby will be able to relate with when he’s older. I plan to diversify the account more over time.
Thanks for stopping by!
Congrats, new dad!
Is it a custodian account or Roth IRA (there are several bloggers gave “income” to baby for posting baby photos on their site so it’s earned income for babies)? What brokerage you chose for your son? (Concern commission for small amount)
Thanks
Hi Linda,
I don’t currently qualify for a Roth so it’s basically a custodian taxable brokerage account. I decided to use TD Ameritrade for this account. So far I’ve been happy with it. I believe their commissions are just $6.95/trade now. If I can keep fees to .5% or below I’m happy, which investing at least $1400 per trade does.
Thank you for stopping by!
A BIG congratulations on your new born baby. I hope you are all bonding very well. I wished I bought stocks for my little ones when they were much younger. I guess it’s never too late to get started. I really like your strategy of buying stocks that that will stand the test of time.
Esthy recently posted…How to Reach Your Goals When You Can’t Afford a Coach
Esthy,
Thank you so much! Yes, he’s such a joy and has really changed our lives.
Thank you for stopping by!
Congrats on the birth of your son AAI! Great times are ahead and love the early start you are giving the little guy. My kids love Disney movies so that prompted me to add that to my portfolio a while back. Congrats again and glad to see the post! AA
AA,
Thanks so much! I wanted to get him started with some companies that will be easy to explain to him what they do. He certainly uses their products and services so far. DIS is a great stock to hold for the long-term.
I’ve watched your blog since I started blogging. You have been the most consistent DG investor I’ve watched. I love the growth in your portfolio. You are killing it. Keep it up, it’s great motiviation!