Santa’s Dividend Stock Portfolio

He's checking it twice

He’s checking it twice

Santa has a busy day coming up. But during the rest of the year, he is semi-retired other than the time he spends keeping up his list of naughty and nice children.  I hear that’s a much easier task now with his new iPad app. Like all great managers, he has hired a team of diligent employees to make the toys that he delivers to the well-behaved girls and boys, undoubtedly leaving him more free time to maintain his dividend stock portfolio.  As a North Pole resident, Santa is not required to report his holdings to the SEC, so we can only speculate on what they are. Knowing what I know about Santa, here is the list of companies that are most likely in his Christmas dividend stock portfolio.

Toys
Toy companies are an obvious core holding in Santa’s portfolio. Due to manufacturing complexities, toy volume, and licensing issues, Santa’s elves frequently outsource their toy making to the big toy companies. Mattel (MAT) is the largest US based toy company. It’s brands include Barbie, Monster High, Hot Wheels, American Girl, Fischer Price, and numerous Disney (DIS) licensed toys. Hasbro (HAS) on the other hand is the company behind Nerf, Sesame Street toys, Transformers, GI Joe, Playskool, and the Star Wars branded toys. So many products from both of these companies have entered my house in the past two years as gifts that I could not resist the 3.6% dividend yield when I bought Mattel back in August.  Today the yields are closer to 3.2% for MAT and 3.0% for HAS, so I am looking for a pullback before buying more.

Retail
Mom, Dad, Grandma and Grandpa all enjoy buying even more toys for the girls and boys in their lives, beyond what Santa delivers. If they are not shopping online at dividend scrooge Amazon (AMZN), they turn to some great dividend paying retailers like Wal-mart (WMT), Target (TGT), Gamestop (GME), and Macy’s (M). The malls are buzzing this time of the year too, and a popular mall REIT is Simon Property Group (SPG). SPG is a blue chip REIT meaning it is a reliable and relatively safe company to own, but the yield is not as high as you get with other REITs.

For the big spenders wanting to make a big impact this Christmas, Tiffany’s (TIF) is always there to sell you that romantic ring buying experience with the classic setting and Tiffany blue box, not to mention a high quality diamond at a healthy markup. Or just head over to Costo (COST) to buy a similar stone but with a bit less romance.  For those shopping at the opposite spectrum, there are plenty of great bargains to be had at Family Dollar Stores (FDO) this Christmas.

Understanding the convenience of using a credit card during the holiday season, Santa would get some broader retail exposure by investing in financial transaction companies like Visa (V), Mastercard (MA), and American Express (AXP), all winners whether shoppers are buying in stores or online.

Electronics
One of the most requested gifts this year, like every year, is the Apple (AAPL) iPad. And like every year, Apple is going to crush the competition this Christmas. I once sold Apple before the Christmas season and it was a big mistake.  You could spend less money and buy a Kindle Fire from Amazon, like when your Aunt Edna bought you that Zune, or just stick with the best tablet out there.  Microsoft (MSFT) sold a million Xbox One’s on the first day of its release. They will sell hundreds of millions of dollars of online gaming credits (which cost them nothing to produce), while Gamestop, Target, Best Buy (BBY) and Wal-Mart will all benefit selling games. Sony (SNE) also released its new Play Station and maintains a dedicated core of gamers. The long-term winner is yet to be determined between these two, but the last generation of consoles tells us there is room for two or three.

TV’s are another popular item this year, and Corning (GLW) is the leading glass manufacture for them and the many handheld devices. After opening all of the toys on Christmas day, parents will surely need to stock up on batteries. For my battery needs I head over to my local Home Depot (HD) for the best selection, and while I’m there in December I usually buy a few more outdoor Christmas light strings to brighten the holiday spirit in my neighborhood. This certainly brightens the Christmas holiday for Dominion Resources (D), a Virginia electricity provider. With a dividend yield of 3.40%, this company helps to light Santa’s way Christmas night, but Dominion is not selling at a great value today.

Holiday Foods
Christmas would not be Christmas if it did not involve cooking way too much food and spending time with family consuming it. The Honeybaked Ham store near me has a line around the block nearing Christmas Day. A large portion of their hams are sourced from Tyson’s Foods (TSN). For the overabundance of her Christmas cookie selection, Grandma turns to Gold Medal Flour and Betty Crocker for all her baking needs, both classic brands of the food company General Mills (GIS). Like toys, cookies are another subject Santa understands better than most of us.

Shipping
Santa knows logistics too.  But let’s face it, delivering all those gifts to all those children around the world in just 24 hours is a tough order to fill. When he cannot handle all the volume, he has been known to turn to shipping companies FedEx (FDX) and United Parcel Service (UPS) for help. With the long-term trend of shoppers turning to online sales, these companies are annual holiday season winners.

Short on investing ideas this holiday season?  Turn to Santa for some inspiration.

Symbol Name

Price

Yield

P/E

P/E Next Yr

MAT Mattel

45.57

3.20

19.1

15.3

HAS Hasbro

52.07

3.00

23.9

15.9

DIS Disney

70.36

1.10

20.8

15.5

WMT Wal-Mart Stores

80.22

2.30

15.4

14.3

TGT Target Corp

63.31

2.70

17.0

13.5

GME GameStop Corp

45.77

2.20

13.8

11.5

M Macy’s

52.04

2.00

14.5

12.0

SPG Simon Property Group

149.36

3.20

37.1

15.7

TIF Tiffany & Co.

88.58

1.70

26.3

20.9

COST Costco Wholesale

122.97

1.00

26.6

22.4

FDO Family Dollar Stores

69.14

1.50

18.1

15.7

V Visa

202.74

0.80

26.7

19.5

AXP American Express

84.50

1.10

20.0

15.6

AAPL Apple

565.00

2.30

14.2

11.9

MSFT Microsoft

38.94

3.00

14.6

13.2

BBY Best Buy

42.80

1.70

-

15.2

SNE Sony

17.89

1.40

22.5

16.6

GLW Corning

16.78

2.30

13.9

11.0

HD The Home Depot

78.40

2.00

21.2

17.7

D Dominion Resources

64.13

3.40

61.0

18.1

TSN Tyson Foods

33.36

0.90

15.7

11.5

GIS General Mills

50.71

3.00

19.0

16.2

FDX FedEx

138.71

0.40

27.8

15.7

UPS United Parcel Service

101.72

2.40

66.6

18.6

* Prices as of close 12/04/2013. Data sourced from Yahoo Finance

Disclosures: Long AAPL, MAT

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14 Responses to Santa’s Dividend Stock Portfolio

  1. Fast Weekly December 5, 2013 at 9:45 pm #

    Nice spin RBD. Now if only General Mills would sell off we could all get in for some solid long term returns. My buy is down at $44, so I either need a large market sell off…..of the threat of massive inflation to get us there. What are your thoughts on your Apple stake? Anything else on this list you’re looking to get into?
    -Bryan

    • retirebeforedad December 5, 2013 at 11:01 pm #

      FW,

      I feel good about the Apple holdings. It creates the best products on earth and pays a nice dividend and plenty of cash and cash flow. Not to mention only a 14 PE, compared to GOOG which is near 30 and no div.

      Of this list, I’m interested mostly in MAT and HAS near 3.5% yield. Also GIS, but not at today’s price. I was looking at TGT recently, but my wife has had multiple bad experiences there recently. So I am second guessing, since she is about to stop shopping there. I know that’s anecdotal, but I want to love the company (I still like shopping there). V and DIS would be others of interest at a much lower valuation. D I think has too much debt, but I’m looking at WGL instead, the local gas utility.

      -RBDt

  2. writing2reality December 5, 2013 at 10:13 pm #

    Nice job of relating some sounds dividend growth stocks to the holidays and gift ideas. Some of the best ideas come from companies we know and love as consumers. Doesn’t hurt as an investor either when it comes to understanding their revenue and business operations.

    From this list I’d look at GIS, WMT, TGT, and MAT, but none of them are where I’d like price wise in order for me to start a position.

    • retirebeforedad December 5, 2013 at 11:06 pm #

      WYOR,
      Yeah I’m not seeing prices I like. I’m putting some money in my Roth this month, and planning to look at ETFs, possibly dividend based ones in the account. Other than that and some dripping and P2P, may be done for the year. That said, economy is picking up, market may keep going into 2014.
      -RBD

  3. Passive IncomePursuit (PassiveIncomePursuit) December 5, 2013 at 11:41 pm #

    No KO? Pretty sure he’s a sponsor as he’s in their commercials. I really like DIS and V. Just wish that DIS would pay more in dividends rather than buybacks. Very Peter Lynchian list. Invest in what you know/use. You’d be hard pressed to find a household that doesn’t use the product/service of at least half of those companies

    • retirebeforedad December 6, 2013 at 7:36 am #

      JC,
      I thought about adding KO and alcoholic beverage companies to this, but had to stop somewhere. Also was going to add PG for batteries, but already had my data. I’m actually not a big fan of the KO ad campaign with the polar bears, so I don’t associate Coke with Christmas. One Up on Wall Street was the first investing book I ever read. But man, it’s been almost 20 years!
      -RBD

  4. Michael Bedtelyon December 6, 2013 at 10:03 am #

    Nice article, I enjoyed it. Really gets me in the Holiday Mood. I Love collecting the “gifts” that keep giving, Dividend Paying Companies. Good luck and seasons greetings.

    • retirebeforedad December 6, 2013 at 10:24 am #

      I like that, dividend stocks, the gift that keeps on giving. Like a beer of the month club!
      -RBD

  5. Kay @ Green Money Stream December 6, 2013 at 2:17 pm #

    I like Santa’s list! Nice article. I’ve also been struggling with what to buy since prices are a little high right now. I did just buy TGT a week or so ago after a dip due to disappointing earnings report.

    • retirebeforedad December 7, 2013 at 7:41 am #

      Kay,
      I’m feeling the same way about finding something I like right now. May wait until the new year other than some dripping. I like TGT here, but my wife has been angry after the last 4 times she’s gone there. Nothing in stock, customer service. Makes me was to stay away, or at least if I buy and it goes down further, I’ll avoid an ‘I told you so’!
      -RBD

  6. Martin December 13, 2013 at 1:15 am #

    Nice list of stocks. I like quite a few of them. Maybe you can also add a dividend growth to your list to put some stocks into a perspective.

  7. Martin December 13, 2013 at 1:17 am #

    Reblogged this on and commented:
    A nice list of the dividend stocks related to Christmas.

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