In this article, we will take a look at the 10 best kid-friendly stocks to buy right now.
Expert Thinks Value Stocks are Making a Comeback
Investors and analysts alike are concerned about where equities are headed in 2025. On December 23, Eric Beyrich, Sound Income Strategies co-chief investment officer appeared in an interview on Yahoo Finance to share his market thesis for equities in 2025.
Beyrich shared his perspective on the market, emphasizing a possible rotation in 2025. He added that drug and mega-cap tech stocks have previously led the market, but as their growth rates continue to decline, a rotation is probable. He also emphasized that value names, especially those that have underperformed over the past two years, are expected to make a comeback. Adding to this, Beyrich suggested that these value names have comparable relative growth rates and their valuation multiples, more often than not, are a third of that of the market.
READ MORE: 10 Stocks That Will Make You Rich In 2025 and 12 Best Energy Stocks To Invest In Now.
Speaking of the S&P 500, excluding Big Tech, the market has underperformed, and with the growth rate for the big seven declining, the market emphasis will more likely gear towards value names. Beyrich also added that as rates come down, housing inflation is also expected to decline. He suggested that “abject extremes” are going to help value stocks, especially because the S&P 500 has been trading at 25 times its forward earnings. He emphasized that people have been investing in these stocks because they are scarce, and with growth rates declining, the market will shift away from more expensive names.
On the flip side, Beyrich acknowledged that some of the names are great companies with huge cash flows, but they do have a pricing issue. Beyrich also shed light on the nature of valuations, suggesting that they behave like pendulums, going extremes in both directions. Overall, he remains extremely bullish on cheap companies, especially those with solid catalysts for improvement.
Stocks with a sustainable and long-standing business model are often deemed safer and have been a household name for adults as well as kids. That said, let’s take a look at the 10 best kid-friendly stocks to buy right now.
A portfolio manager studying various stocks and other securities on a tablet.
Our Methodology
To come up with the 10 best kid-friendly stocks to buy right now, we went over multiple similar rankings on the internet. We then examined the hedge fund sentiment of each stock and picked the most popular ones. Our list is in ascending order of the number of hedge fund holders as of Q3 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
10 Best Kid-Friendly Stocks To Buy Right Now
10. Mattel, Inc. (NASDAQ:MAT)
Number of Hedge Fund Holders: 25
Mattel, Inc. (NASDAQ:MAT) is a manufacturing and entertainment company based in California, United States. Some of its most prominent brands include Barbie, Hot Wheels, Fisher-Price, American Girl, Thomas & Friends, UNO, and Masters of the Universe. Mattel, Inc. (NASDAQ:MAT) was founded in 1945 and has been a kids’ favorite since its inception. To maintain popularity, the company has been producing more innovative friendly products. For example in December alone, the company announced the global launch of its “Monster High Fangtastic Life” mobile game. During the same month, MAT launched a Barbie-themed dance for the VR game, Synth Riders, in collaboration with Kluge Interactive.
Overall, the company’s popularity is reflected in its financial performance. In the third quarter of 2024, the company generated solid free cash flow over the past 12 months and significantly expanded its gross margin and adjusted EPS. In addition to that, Mattel, Inc. (NASDAQ:MAT) logged $372 in net income, up by $226 million, and $488 in operating income, up by $14 million. While the company saw a slight decline in sales, in the US and internationally, the company has a sustainable business model and is venturing into avenues of entertainment. Analysts are also bullish on the stock and their median price target of $23 represents an upside of 28% from current levels.
9. Roblox Corporation (NYSE:RBLX)
Number of Hedge Fund Holders: 52
Roblox Corporation (NYSE:RBLX) is a video game developer based in California, United States. Millions of people use the platform to create games, play games, and connect with other people. The company has grown to become a global community of creators and as of Q3 2024, RBLX had nearly 88.9 million daily active users, 2.9 million developers, 20.7 billion engagement hours, and 6 million active experiences.
To establish itself as a go-to option for global creators, the company has been working to improve its communal experience. Only recently on December 2, Roblox Corporation (NYSE:RBLX) launched a party feature on Roblox, allowing a group of friends to experience virtual reality together. With the new feature, users can automatically join the same instance of a game in the same place without having to go through the hassle of finding each other. In addition to its exquisite communal experience, Roblox Corporation (NYSE:RBLX) also offers fun themes to keep its hype alive. On December 17, RBLX launched a set of winter and festive-themed experiences across 24 games and experiences. The platform’s focus on entertainment and fun is a key element that makes it one of the best kid-friendly stocks to buy right now.
SaltLight Capital stated the following regarding Roblox Corporation (NYSE:RBLX) in its Q3 2024 investor letter:
“Roblox Corporation (NYSE:RBLX) has firmly established itself as the dominant player in user-generated gaming within Western markets. Meanwhile, Tencent has developed a similar ecosystem in China with its WeChat Mini-games platform. Owning both gives us a unique vantage point to assess the evolving landscape of user-generated gaming platforms globally.
At its recent investor day, Roblox set an ambitious target of reaching 10% of gaming content revenue, of which it estimates the total pool is around $180bn (for context, in the last twelve months, it made $4bn in bookings).
We think this will be a challenging target, but it will be positive for the business directionally. The reason is that Roblox has spent the last three years heavily investing in re-engineering its game platform to be high fidelity, performant and widely available across platforms. They also share economics with their creators to the point now that the absolute numbers in highly engaged games are enough to support a small game studio. The result is that the quality of games has materially improved, attracting additional engagement – particularly from older users…” (Click here to read the full text)
8. McDonald’s Corporation (NYSE:MCD)
Number of Hedge Fund Holders: 60
McDonald’s (NYSE:MCD) popular Happy Meal, its mascot, and intriguing advertisements have continued to attract kids from across the globe. The fast food chain has been operating since 1940 and now boasts more than 40,000 locations across 100 countries worldwide, with 95% of them owned and run by independent business owners. The fast food company feeds nearly 68 million people every day, proof of its robust and sustainable business model. MCD has a huge emphasis on providing simple everyday value meals, which is also its selling point, and a key driver for long-term growth.
In the third quarter of 2024, the company generated $6.9 billion in consolidated revenues, an increase of 3% from the same quarter in 2023. Systemwide sales for the same quarter across 50 loyalty markets were $8 billion, and $28 billion for the trailing 12 months, as of September 2024. While sales declined in international markets, the US market grew by 0.3%. McDonald’s (NYSE:MCD) attributes its growing revenues in the US to its targeted marketing campaigns and value meals.
Carillon Tower Advisers’ Carillon Eagle Growth & Income Fund stated the following regarding McDonald’s Corporation (NYSE:MCD) in its Q3 2024 investor letter:
“McDonald’s Corporation (NYSE:MCD) performed well as it met the expectations of investors looking for improvements in relative market share trends. The company’s introductions of menu items at premium- and medium-price tiers are picking up pace, allowing it to capture value more effectively.”
7. Pinterest, Inc. (NYSE:PINS)
Number of Hedge Fund Holders: 66
Pinterest, Inc. (NYSE:PINS) is a prominent social media platform known for its aesthetics. The visual discovery engine is loved by kids and adults alike, allowing users to download wallpapers for their mobile phones, tablets, and desktops. Users also use the app to brainstorm decor ideas, create visual boards, and sell products. As of Q3 2024, the company had over 537 million monthly active users who save more than 1.5 billion pins every week. The platform is also gaining immense traction as a social commerce platform, with more than 50% of users categorizing Pinterest as a place to shop.
Pinterest, Inc. (NYSE:PINS) has introduced a variety of product updates in 2024 to increase usage and enhance product performance. Earlier in June, the company introduced a new way to share Pinterest boards on social media, allowing users to flaunt their aesthetic on more public platforms. More recently on September 24, the company launched a new way to create and share collages, allowing users to mix collages, collaborate with other users, and share them. Pinterest, Inc. (NYSE:PINS) is also working diligently to become a full-funnel advertising solution. To align with the goal, on October 1, the company launched its Pinterest Performance+ Suite, allowing advertisers to use Pinterest Performance+ campaigns to meet sales objectives. These campaigns are highly targeted and time-efficient.
RiverPark Advisors’ RiverPark Large Growth Fund stated the following regarding Pinterest, Inc. (NYSE:PINS) in its Q3 2024 investor letter:
“Pinterest, Inc. (NYSE:PINS): Similar to GOOG, PINS was a top detractor in the third quarter despite reporting solid second quarter results and giving guidance that, it seemed to us, fell within the growth framework issued at the September 2023 Investor Day. Specifically, second quarter Monthly Active Users (MAUs) were 522 million, up 12% year-over-year and 2 million better than estimates, Revenue was $854 million, $5 million better than estimates, and EBITDA was $180 million, $4 million better than estimates. Revenue guidance for the third quarter of $885-900 million (+17% growth) was slightly below expectations and seemed to be what drove the stock down despite being squarely within the company’s 3-5-year guidance of mid-to high teens percentage revenue growth.
We believe Pinterest to be an extremely well-positioned internet advertising platform. Users are increasingly coming to Pinterest to get inspiration for their home, their style, or upcoming travel, which often means they are actively looking for products and services to buy. The company currently has 522 million MAU’s, 2/3 of whom are female (who continue to control the lion’s share of household purchasing budgets), which positions the company well to continue to take share of future ad dollar allocations. Continued growth of MAU’s and ARPU (grew 8% in the quarter), and the ramp of third-party relationships with Amazon and Google, should return the company to revenue growth rates approaching 20% for the coming years. In addition, strong cost controls should drive EBITDA margins back to the 2021 peak (40% v the current 21%), leading to strong growth in earnings and cash flow in the years to come.”
6. The Coca-Cola Company (NYSE:KO)
Number of Hedge Fund Holders: 69
Coca-Cola (NYSE:KO), a soft drink manufacturer, ranks seventh on our list of the best kid-friendly stocks to buy right now. The Coca-Cola Company (NYSE:KO) is a company known to nearly every kid across the globe, which can be attributed to its targeted marketing campaigns and expansion strategies. Over the past few months, the company has announced new product lines and additions to existing product lines and brands. Fast forward to December 19, KO announced the acquisition of Billson’s, an Australian alcohol brand. The acquisition will be completed on January 31, 2025, and will serve as an interesting addition to KO’s portfolio.
The Coca-Cola Company (NYSE:KO) also exhibits a sound financial performance supported by its expansion strategy. In the third quarter of 2024, the company logged $11.9 billion in revenue, with organic revenues growing 9% year-over-year. The company is known for its consistent performance because over the past 5 years, The Coca-Cola Company (NYSE:KO) has grown its revenue at a compound annual growth rate (CAGR) of 6% and its free cash flow at a CAGR of 7%.
5. NIKE, Inc. (NYSE:NKE)
Number of Hedge Fund Holders: 75
NIKE, Inc. (NYSE:NKE) is an athletic footwear and apparel company, with a market share of almost 35% in the sports footwear category in the United States. The company is known for its brand image as a leading athletic footwear company, popular among sports fanatics. In December alone, the company signed major agreements with sports organizations such as the Brazilian Football Confederation and the Uruguayan Football Association. In addition to that, NIKE, Inc. (NYSE:NKE) also launched new exclusive shoes in collaboration with major players such as Paige Bueckers. These key branding strategies and partnerships allow NKE to establish a strong footing in the industry.
On the financial front, in the fiscal first quarter of 2025, NIKE, Inc. (NYSE:NKE) generated $11.6 billion in revenue, of which the NIKE Brand revenues were $11.1 billion, NIKE Direct revenues were $4.7 billion, and wholesale revenues were $6.4 billion. In the same quarter, the company saw a 120 basis point increase in gross profits, reaching 45.4%. NIKE, Inc. (NYSE:NKE) shares that their results met expectations and expects momentum to grow further.
4. The Walt Disney Company (NYSE:DIS)
Number of Hedge Fund Holders: 76
The Walt Disney Company (NYSE:DIS) is a mass media multinational company that ranks fifth on our list of the best kid-friendly stocks to buy right now. The company holds dominance in the media industry and we say that because of its vast array of media options and intellectual property. Walt Disney owns some of the world’s biggest studios including Pixar, Marvel, and Lucasfilm, impossible for competitors to replicate. In addition to that, the company has also received countless nominations for its awards and shows.
Earlier in February, the company announced a joint venture to bring the most entertaining brands to India, significantly expanding its customer base. More recently, on December 4, Walt Disney (NYSE:DIS) launched ESPN on Disney+, attracting sports fanatics from across the globe to the platform, offering over 30,000 live sports events every year. Within the first 90 days of launch, viewers can expect nearly 5,000 live events such as NFL, NBA, NHL, College Basketball, and Australian Open.
Mar Vista Investment Partners’ Mar Vista Focus strategy stated the following regarding The Walt Disney Company (NYSE:DIS) in its Q2 2024 investor letter:
“The Walt Disney Company’s (NYSE:DIS) shares declined after its earnings release, even though the company exceeded recently upgraded financial forecasts. While Disney+ and Hulu reached a milestone by turning their first quarterly profit, the company cautioned about theme park attendance returning to pre-pandemic norms. This signals a deceleration following a period of exceptional growth, impacting the stock as theme parks and experiences account for roughly 60% of Disney’s earnings. Despite broader consumer worries, Disney’s stock is still trading with a significant discount to fair value. We expect the gap between Disney’s market price and its intrinsic value to shrink as its streaming division evolves and increases profitability over time.”
3. Spotify Technology S.A. (NYSE:SPOT)
Number of Hedge Fund Holders: 98
Spotify Technology S.A. (NYSE:SPOT), an audio streaming company, has grown significantly over the past few years. It allows people to discover music, listen to podcasts, stay on top of celebrity tours, and optimize listening profiles. The app is present in 184 countries and has more than 640 million monthly active users, comprising 252 million premium subscribers. The company grew its monthly active users by 11% year-over-year and revenue by 19% year-over-year to reach EUR 4 billion in the third quarter of 2024.
2024 marked one of the biggest Spotify Wrapped events yet, attracting more users to the audio streaming application. To improve and provide premium customer satisfaction, Spotify Technology S.A. (NYSE:SPOT) is making significant investments in AI. On December 4, the company announced that it made improvements to its AI DJ and AI Playlist, with a new addition; Spotify Wrapped AI Podcast. With these advancements, users can enjoy a more personalized streaming experience, positioning it as a customer favorite. In the third quarter of 2024, Spotify Technology S.A. (NYSE:SPOT) expanded its AI Playlist in beta to six markets, launched comments for podcasts, and expanded music availability to 85 new markets.
Artisan Partners’ Artisan Mid Cap Fund stated the following regarding Spotify Technology S.A. (NYSE:SPOT) in its Q3 2024 investor letter:
“Among our top Q3 contributors were Argenx, Spotify Technology S.A. (NYSE:SPOT) and Exact Sciences. Spotify is a leading global audio streaming franchise with over 600 million monthly active users. We believe its position in the supply chain is solid given a secular trend of fragmentation in the music industry as well as internal product and pricing initiatives. Shares rallied after the company reported strong earnings results, including 20% revenue growth. Importantly, the company’s profit margin is expanding nicely, and we believe it can rise further due to likely price increases, potentially better terms with labels and further cost discipline.”
2. Netflix, Inc. (NASDAQ:NFLX)
Number of Hedge Fund Holders: 121
Netflix, Inc. (NASDAQ:NFLX), one of the biggest media streaming companies in the world, ranks second on our list of the best kid-friendly stocks to buy right now. The company has garnered immense popularity for its series and movies, which is evident from its growing audience of over 600 million users. To increase customer acquisition globally, Netflix is expanding its offerings into new cultures and languages.
Netflix’s (NASDAQ:NFLX) advertising business stands out. It has been two years since Netflix launched its advertising business and in the third quarter of 2023, the company’s ad business accounted for more than 50% of sign-ups. Membership on the company’s ads also grew by 35% quarter-over-quarter during the same period. Overall, revenue during the quarter grew by 15%, 1% higher than the forecast, and average paid memberships increased by 15% year-over-year.
1. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 158
Apple Inc. (NASDAQ:AAPL), one of the most popular companies in the world, beat its fiscal fourth-quarter earnings expectations by reporting $94.9 billion in revenue which was up by 6% year-over-year. Of this, its product revenue accounted for nearly $70 billion and its services segment generated $24.9 billion. Its business performance brought in almost $27 billion in operating cash flow, making it possible for Apple Inc. (NASDAQ:AAPL) to return more than $29 billion to its shareholders.
The company is a favorite, especially among kids, for its constantly updating product lineup and brand image. Keeping the momentum in check, Apple Inc. (NASDAQ:AAPL) delivered updates to Apple Music, Apple Intelligence, its hardware offerings, and other Apple features. Recently on December 11, the company announced an update to voice memos with layered recording in the iPhone 16 Pro lineup. On the same day, the company announced new features in Apple Intelligence allowing users to enhance the user experience immensely with more opportunities for personal expression and customization, emoji creation, and improved writing.
Mar Vista Investment Partners, LLC stated the following regarding Apple Inc. (NASDAQ:AAPL) in its Q3 2024 investor letter:
“Apple Inc. (NASDAQ:AAPL) stock was strong in the quarter as investors viewed the company’s generative AI roadmap and iPhone 16 product cycle positively. The market was reminded of the strength of the Apple ecosystem as management demonstrated how generative AI solutions would be integrated into its iOS 18 operating system, which was broadly released in the iPhone 16 late in calendar Q3. We believe Apple’s generative AI-enabled products should spur a meaningful iPhone upgrade cycle and create new avenues of monetization through its app store and advertising offerings. We believe this will support intrinsic value growth that will range between high single digits and low double-digits over our investment horizon.”
While we acknowledge the potential of AAPL to grow, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than AAPL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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