Stocks that Could Benefit from the High Price of Raising Kids

A new report from the U.S. Department of Agriculture found that married, middle-income parents will spend $233,610  to raise a child born in 2015 from infancy to adulthood, a figure 3% higher than the prior year, writes Validea CEO John Reese in last week’s Forbes.

Using his guru-inspired stock screening models, Reese identifies five high-scoring stocks (representing a range of spending categories), that could see some upside from the high price-tag:

  • Procter & Gamble (PG) sells branded health and beauty, baby care and other home and family products. The company generates cash flow-per-share in excess of the market mean and a favorable dividend yield.
  • Unilever PLC (UL) is a food, home and personal care products company that scores well due in part to shares outstanding of nearly four times the market average and trailing 12-month sales of more than double the market mean.
  • Scholastic (SCHL), a publisher and distributor of children’s books and related products, is favored for its growth in earnings-per-share and modest leverage as well as its price-sales ratio.
  • Gamestop (GME), a video game retailer, earns high marks for its earnings yield and return-on-total capital as well as favorable price-earnings and price-sales ratios.
  • Walt Disney Co. (DIS) the entertainment behemoth, scores highly for its substantial revenue base, earnings growth, modest leverage and favorable earnings-per-share.