Yep, it’s that time of year again. The time when policy wonks – like me – watch the Supreme Court and try to read the tea leaves about how those nine folks will rule on the issues before them.
The big ones this year, of course, are the two cases revolving around same sex marriage. Both or either of them could have the impact of legalizing the practice across the entire country. Or not, depending. While it’s not my place to take sides or express my political views here, I do think there’s an investment angle to same sex marriage.
If same sex marriage continues to gain in acceptance, either by a series of state actions or an overarching federal one, then GLBT people will marry. That means they’ll be able to take advantage of the tax favors doled out to married couples. While it may not be much, it does mean that each married couple will have extra disposable cash to spend or invest.
That fact, combined with the effects of brand loyalty and the habit of investors to invest in companies that make the products they purchase, has the ability to influence share prices in a couple of ways. Both increased sales for brands popular with the GLBT demographic and those company’s shares may experience a bit of a pop.
So which brands are most popular with the GLBT community?
Google Inc (NASDAQ:GOOG)
According to the YouGov brand index, Google Inc (NASDAQ:GOOG)’s Android operating system is the most positively perceived brand among the LGBT demographic. Not a real surprise considering how well considered it seems to be among the rest of the world. Google Inc (NASDAQ:GOOG) makes good products and markets them well. Heck, Android held the top spot on the list and YouTube held the sixth!
The stock is a good buy as well. Google Inc (NASDAQ:GOOG) might seem high, but its P/E is not terribly high at 25. That’s a level that indicates a good upside, but not irrational exuberance. The 25.43% operating margin for 2012 is another positive sign for the big tech firm.
Apple Inc. (NASDAQ:AAPL)
Any list of good investments – despite the recent bad press – should see Apple Inc. (NASDAQ:AAPL) on it. Of the top 20 on the brand index, Apple Inc. (NASDAQ:AAPL) holds four slots with the iPhone, iPad, iPod and Apple itself. It also holds the #2 and #3 slots right behind Android.
Apple Inc. (NASDAQ:AAPL) is still a good investment. Even with the recent drop the company is still making a great profit, has a ton of cash in the bank, and its P/E tells me it’s undervalued for its earnings. Sooner or later the media thing will fade and Apple Inc. (NASDAQ:AAPL) will climb back up. Savvy investors will buy it now, while it’s at a media-induced discount.
The Walt Disney Company (NYSE:DIS)
Possibly the most GLBT-friendly large corporation in the world, Disney has consistently withstood attempts at boycotts and other pressures to continue welcoming GLBT patrons and promoting equality for all. There’s a good reason for GLBT folks to appreciate what happens at the house of the mouse.
Disney’s stock – long thought of as sort of dormant by some investors – has been on a bit of a tear this last year, growing 37% since mid-April 2012. The acquisition of LucasFilm – and the Star Wars and Indiana Jones franchises – isn’t going to hurt going forward, either. It’s time to buy some Disney.
Starbucks Corporation (NASDAQ:SBUX)
Starbucks comes in at #17 on the GLBT brand index and just last week the company showed why. At a shareholder meeting CEO Howard Schultz took a question from a shareholder about whether the company’s support for same sex marriage is lowering the firm’s performance. His response was that Starbucks didn’t always make decisions purely on financial data and that, if the shareholder didn’t like it, he could feel free to sell his shares.
The stock is essentially flat for the last 12 months. However, since bottoming last August its climbed 31% and the company increased its dividend 23.5%. Not too shabby. If Starbucks is considered by some to be not doing as well as it should, it will be a monster when it catches up.
Amazon.com, Inc. (NASDAQ:AMZN)
Amazon won hearts in the gay community with its recent commercial that featured a pair of married men. In addition, CEO Jeff Bezos donated millions to help pass the same sex marriage referendum in Washington State last year. It’s no wonder the GLBT community considers Amazon a friend.
Still, I’ve never been high on Amazon as an investment. I just think the company needs to stop focusing on expansion and start showing a real profit before any more investment dollars should be committed to it. That won’t stop people from investing, but it’s too risky for me.
Look, I’m not saying that all GLBT people will have the same likes and dislikes. Nor am I saying that all GLBT people should have the same investment strategies and choices. But demographically, there’s a real reason to think that some companies will be helped a bit should gay marriage spread nationwide.
The article Why Gay Marriage Could Be Good for Investors originally appeared on Fool.com and is written by Nate Wooley.
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