Millennials, those smartphone-toting, Netflix-watching, Uber-riding 20-and-30-somethings, have supplanted Baby Boomers as America’s largest generation. And while Millennials may not be the biggest investors (only one in three say they invest in stocks, according to a Bankrate.com survey), their spending habits will shape the stock market in the coming years and decades. Soon enough, Millennial stocks will dominate the market.
What are Millennial stocks? Companies that cater to Millennials’ tendencies toward instant gratification—fast service, fast shopping, fast news delivery, etc. The term Millennial stocks will no doubt evolve in the coming years along with Millennials themselves. For now, there are a number of publicly traded companies that qualify as Millennial stocks. As Millennials age, earn higher-paying jobs and thus have more money to spend, the following stocks are flourishing—and should continue to do so as America’s largest generation grows up.
Here are three Millennial stocks that stand out:
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Millennial Stock #1: Activision Blizzard (ATVI)
A favorite of our recently retired value expert Roy Ward, shares of this video-game developer have grown considerably of late. Despite some ups and downs, ATVI stock is up 14% in 2018, spurred in part by double-digit earnings growth in each of the last two quarters. Activision’s success is due to the extreme popularity of its myriad video games.
Activision’s portfolio of top game franchises includes World of Warcraft, Call of Duty, Skylanders, StarCraft and Diablo. The company also has a long-term exclusive license for certain Marvel Enterprises comic book characters, including Spider-Man and X-Men.
Activision acquired King Digital in February 2016. King is best known for its super popular Candy Crush games and had nearly 500 million monthly active users for its mobile-focused games. Activision now has global scale, multiple strong franchises and growing digital offerings.
The stock peaked at an all-time high of 81 in July, before getting knocked all the way back to 68 in August. It has since inched its way back to 72, and the long-term trend remains up.
Millennial Stock #2: Domino’s Pizza (DPZ)
Domino’s wasn’t exactly a no-name before Millennials started ordering pizzas by the truckload from one of the nation’s fastest delivery chains. But Millennials have undoubtedly had a profound impact on Domino’s business: the company’s sales growth has swelled in each of the last five years, going from 1.6% growth in 2012 to 12.8% last year. Analysts anticipate 24% sales growth this year.
Hence, a six-month chart that looks like this:
Millennial Stock #3: Netflix (NFLX)
Millennials aren’t solely responsible for the streaming video behemoth’s ascension. But they are Netflix’s biggest client base. Eighty percent of Millennials view Netflix favorably. In fact, it’s their third-favorite brand (behind YouTube and Google (GOOG)), according to a recent study by research firm Morning Consult. And they’ve led the charge in making Netflix the most popular source of television content in the U.S. – 40% of Millennials say it’s their favorite video platform, well above the 27.2% favorable rating among the average respondent.
As Millennials have become Netflix’s biggest customer, Netflix stock has taken off; NFLX shares have nearly doubled in the last year and more than tripled in the last two years.
That makes it a stock for all ages, and one of the market’s great growth stocks. But it’s also a Millennial stock.
Investment analyst and Chief Analyst of Cabot Wealth Daily, Chris Preston brings you all the latest from the investing world. Sign up to get updates and breaking news delivered FREE to your inbox. Get unlimited access to our library of complimentary investing reports.Sign up now!
*This post has been updated from an original version, published in 2017.