5 Sectors Millennials Prefer To Consumer Goods, And The Stocks That Prove It

Jim Cramer recently said on "Mad Money" that the boom in travel and leisure stocks is a direct result of millennials’ activity. Specifically, millennials are increasingly disinterested in consumer goods.

“They don't have much of a yen for material goods anymore. They want to go see and do things,” said Cramer.

He went on to say the “selfie generation” especially would prefer to go somewhere cool and post a picture on social media than amass possessions.

Cramer didn’t indicate whether he thought the trend was overall a positive or negative to the markets, but it seems safe to assume that sentiment among the older generations is negative.

Millennials have been blamed for “ruining” and “killing” everything from wine and golf to handshakes and democracy.

So, in a world where they are accused of both dining out too much and not dining out enough, here are five sectors millennials can be counted on to help perform.

Food

Every generation likes to eat, but it wasn’t until the '90s that “foodies” became ingrained in popular culture.

That said, the vast majority of restaurants foodies want to patron are private operations. In the publicly traded realm, the companies that are earning millennial dollars are those that can provide quick and convenient food. Three top performing food stocks right now are:

• McDonald’s Corporation MCD: The stock has been on an incredible run this year, up 27.5 percent and at all-time highs. It also has a solid dividend to boot.
• GrubHub Inc GRUB: Relatively new on the market, the food delivery service has seen over 41 percent in share price growth over the last year, driven largely by college students who would prefer not to eat on campus or cook.
• Dave & Buster's Entertainment, Inc. PLAY: Dave & Buster’s is like Chuck E. Cheese’s for adults, offering casual dining, a sports bar and games. It’s up 32 percent over the past year.

Travel

As Cramer said, millennials love to travel. Airlines and hotel booking services have had a solid year, and even some hotel chains have seen strong gains, although there are growing concerns in the industry over the rapid rise of Airbnb.

Three of the best travel stocks over the last year are:

• Delta Air Lines, Inc. DAL: Delta shares are up 43 percent over the last year. New lows for the price of oil have helped to make air travel more affordable for both the company and consumers.
• Expedia Inc EXPE: The stock is up 34.8 percent over the last year. The company saw especially strong growth this past quarter from its subsidiaries.
• Marriott International Inc MAR: Shares are up 43.3 percent over the last year. In March, Mariott’s CEO outlined the company’s objectives for 2019.

Video Games

Video games have never been hotter. ESports is on the rise, and established players in the sports media field are just starting to take seriously. The emerging industry already attracts audiences large enough to fill arenas and pay out millions in prizes.

These three game developers are at all-time highs:

• Activision Blizzard, Inc. ATVI: Shares are up 60.6 percent this year. Big things are expected from the coming launches of "Destiny 2" and "Call of Duty: WWII + eSports.”
• Electronic Arts Inc. EA: Shares are up over 37 percent this year. The company has benefitted from is push to downloadable games, as opposed to physical copies.
• Take Two Interactive Software Inc TTWO: Shares are up 53.8 percent this year. “Red Dead Redemption 2” has been delayed, disappointing gamers and investors alike, but is expected to be a star regardless.

TV Streaming

Millennials largely prefer to stream television shows and movies over the internet rather than watch through cable subscriptions because of its significantly cheaper pricing and mobility. They also boast high quality and popular original programming that can’t be had with cable. The sector was largely driven by Netflix, Inc. NFLX’s disruption of the traditional TV industry.

Three companies that have made a name among millennials are:

• Netflix: Shares of the company are up 62.6 percent over the last year, and analysts largely expect them to keep climbing.
• Time Warner Inc TWX: Time Warner shares have climbed 27.4 percent over the last year. The company owns HBO, which has made major efforts to expand its online streaming business.
• Alphabet Inc GOOG GOOGL: Through YouTube Red, the company offers original, professionally produced long-form content with the help of popular YouTubers. The subscription also makes all of YouTube ad-free and downloadable for offline viewing. Shares are up 20 percent this year.

Music

There’s no doubt that millennials are just as big on music as generations before. Perhaps even more so thanks to the internet making it possible for anyone to promote their music without a record label.

That said, it’s tough to judge how the music industry has been performing, due to the immense popularity of privately held streaming platforms like Spotify and SoundCloud. Millennials tend to prefer the speed, ease and relatively low cost of these services compared to buying individual songs or albums.

Three stocks that have performed well this year are:

• Sirius XM Holdings Inc. SIRI: The satellite radio company recently climbed out of penny stock range, rising 30 percent to $5.38. It’s growth has largely been fuelled by M&A rumors with Pandora Media Inc P.
• Madison Square Garden Co MSG — The company owns Madison Square Garden, a large venue for concerts and other events in New York City. Shares are up 12 percent this year.
• Logitech International SA (USA) LOGI — The stock is up 50.8 percent this year. The company owns the popular Ultimate Ears brand of portable speakers.

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