Buy a share, drink a bourbon
If you buy a share of stock, you may be eligible for more than just a dividend
NEW YORK (CNNfn) - Bourbon, Spam and ski weekends are just some of the things you can get free or at discounted prices as long as you're a shareholder.
Shareholder perks are a pleasant, if monetarily insignificant, diversion from the normal headaches of owning most stocks.
Unknown to many shareholders, they are sometimes eligible to receive free or discounted goods and services from the companies whose stock they own.
Charles Carlson, author of "Free Lunch on Wall Street," said these shareholder perks generally fall into three categories:
- Shareholder welcome packages, most often a grab bag of company products given to the new purchaser of stock.
- Shareholder discounts, which are discounts given on a company's offerings.
- Affinity perks, which give special privileges to shareholders.
While none of these perks are good enough reason to buy a company's stock, they do spice things up a little.
Many companies use the delivery of their annual report as a way to say thanks for putting your money into their shares.
Pixar Animation Studios (PIXR), the company best-known for the movie "Toy Story," offers its stockholders a glossy annual report filled with images from its animated offerings.
This year, it also gave its shareholders a videotape of "Geri's Game," a Pixar short film which grabbed an Oscar in March at the Academy Awards.
The freebies don't stop with the annual report, though. Attending the annual stockholders meeting can increase your booty. Many companies take the opportunity to thank their shareholders (and, perhaps, head off some animosity over earnings) by giving out knick-knacks.
Anheuser-Busch Cos. (BUD), best known for its Budweiser beer, offers up some of its fermented freebies. If your taste runs to hard liquor, Fortune Brands Inc. (FO) serves up samples from some of its products, including Jim Beam bourbon and Whyte & Mackay scotch. Before spinning off its tobacco unit, it also used to hand its stockholders Lucky Strike and Pall Mall cigarettes.
Not all companies are looking for shareholders who can hold their liquor. Some test their meat mettle.
Hormel Foods Corp. (HL), maker of Spam, provides shareholders with samples of its meat products. Conagra Inc. (CAG) gives its shareholders a free lunch made up of Country Pride Chicken, Healthy Choice frozen meals and Armour meat.
After that, you can head over to the Hershey Foods Corp. (HSY) meeting to have dessert with a variety of their chocolate products.
Let the shareholder try it
Companies don't offer shareholders perks just because they love them. Carlson says firms have solid business reasons for handing out the freebies.
Perks can be a way of attracting or keeping individual shareholders and in this way can help the company assure it will have a diverse shareholder base. The larger the pool of shareholders, the less likely it is one interested party can acquire large chunks of stock and attempt something like a hostile takeover.
Additionally, companies can use their shareholders as a way of test marketing their newer products. A firm introducing a new product can probably count on a shareholder to give honest feedback on it since it affects that person's finances.
More benignly, companies see shareholders as a built-in customer base. If a stockholder likes the new product, they're not only more likely to buy it themselves but they may also recommend it to others around them. The word of mouth can be as effective as a splashy, multimillion dollar ad campaign.
Unfortunately, Carlson says you shouldn't expect it from every stock. "The number of companies offering these perks are pretty small," he said. "and there's no real trend toward increasing it.
Freebies early and often
Some businesses believe the best time to foster investor goodwill is as you're buying the stock for the first time.
3M Co. (MMM), for example, gives its new shareholders a bundle of its household and office products, including Post-it notes, tape and sandpaper.
Colgate-Palmolive Co. (CL), ensures you'll smell your best with its giveaways, offering you Colgate toothpaste and Mennen Speed Stick.
Now that they've gotten your investment dollars, companies then try to get you to spend more of your money on their products.
To that end, Brown-Forman Corp. (BFB) helps you out with your upscale tastes, providing a 50 percent discount on Lenox holiday china and also on its Hartmann luggage.
You can take that luggage with you when you travel to the Greenbrier, a prestigious resort located in West Virginia.
CSX Corp. (CSX), the railroad company, owns this resort and offers its shareholders "house parties" there using discounted rates. You can also get a one-time 10 percent discount, although there are restrictions.
Such discounts are typical of entertainment perks for shareholders. Host Marriott Corp. (HMT) gives its stockholders $10 off weekend stays at certain Marriott hotels and a 10 percent discount on weekend stays at its Courtyard accommodations.
Schussing shareholders can take Ralston Purina Group (RAL) up on its discounted rates at its Keystone Resort in Colorado. Ralston's discounts include accommodations as well as reduced lift ticket and ski rental costs.
And if the stock market isn't enough of a gamble for you, pick up a share of Santa Anita Cos. (SAR). This firm operates the Santa Anita horse racing track outside of Los Angeles.
Shareholders don't get any inside tips on winning the trifecta but you get free admission and if you own 100 or more shares, you get tickets to the Club House, which provides you the best view of your winning (or losing) horse.
-- by staff writer Randall J. Schultz