3 companies to buy for your children's future wealth

Teach your kids how to make money investing with three great stock tips: Domino's Pizza Enterprises Ltd (ASX:DMP), Greencross Limited (ASX:GXL) and Premier Investments Limited (ASX:PMV).

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

What better way to help your children become financially successful than to teach them about investing.

They may be a little young to understand the finer details, but it's a great way to show them another way to save and even make money. It could be the one gift that they take into their adulthood to build their own lives on.

I talk to my kids about companies and even try to get stock tips from them by asking them where they shop or what they like to buy. It can be a two-way street once they're older.

They might return the favour and give dear old mum and dad some good investing tips as well!

Here are three successful companies that are easy to understand and which children and young adults may be familiar with already. (They may be great for your portfolio, too!)

1) Premier Investments Limited (ASX: PMV)

Your kids may not be familiar with retail guru Solomon Lew and fashion brands such as Portmans, Just Jeans and Jacqui- E (unless they go shopping with mum a lot), but they probably know Smiggle, the hot stationery store chain popular with children. With 200 stores in Australia, the successful business is expanding into the UK in a big way. The company projects to have 200 stores there within five years. The stock pays a 4.0% fully franked yield and is trading at 19 times earnings.

2) Greencross Limited (ASX: GXL)

When the family dog needs a new collar or the cat gets sick, then you might be going to a Greencross veterinary office or a Petbarn and City Farmer pet supplies store. Greencross acquired the two growing supply store chains recently, adding a big retail business to its expanding pet healthcare network. The stock is down from about $10.60 to $8.00 since August, but it could be consolidating after the two acquisitions. Earnings are forecast to rise as much as 19% annually over the next two years, so there's still good growth to come.

3) Domino's Pizza Enterprises Ltd (ASX: DMP)

This could be one the kids could tell the parents a thing or two about! Here's a kid analyst's take on the stock-  Kids like pizza, Domino's makes a lot of pizza, Dad or Mum pay for the pizza, Domino's makes a lot of dough. Anyway, the company is expanding rapidly in Japan, with plans to more than double the current 320 store count in the next five years. Its Australia and New Zealand division racked up 6.3% same-store sales growth and added its 600th ANZ store in FY 2014. The stock is still at a high 43 price-earnings ratio, almost double the forecast 24% annual earnings growth in the next two years. Tell the kids it may be better to wait for a pullback for now.

Motley Fool contributor Darryl Daté-Shappard does not own shares in any company mentioned. 

More on ⏸️ Investing

A white and black robot in the form of a human being stands in front of a green graphic holding a laptop and discussing robotics and automation ASX shares
Technology Shares

Joining the revolution: How I'd invest in ASX AI shares right now

Advances in artificial intelligence (AI) could usher in a new industrial revolution. Here’s how you can invest in it.

Read more »

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »