5 Stock Picks for Romantics

One of the cardinal rules of investing is that you should never fall in love with a stock. But in honor of Valentine’s Day, we’ve found five romantically inspired companies that deserve some affection. These stocks aren’t just for flings. Look at them as candidates for long-term relationships.

You may not be familiar with L Brands (symbol LB, $65), but you’ve probably heard of two of its sensual subsidiaries: Victoria’s Secret, the lingerie chain, and Bath & Body Works, which sells soaps, lotions and other spa-like products. Both retailers garner more than one-fourth of all sales in their markets, and both have room to grow. Analysts see L Brands, which does about $11 billion in sales annually, boosting earnings by 12% in the fiscal year that ends January 2015. At 18 times estimated earnings for that year, the shares are a bit more expensive than the overall market, but the price is fair given L Brands’ growth potential. (All prices are as of November 29.)

For something with a little more bling, consider Signet Jewelers (SIG, $77). The Akron company owns the Jared and Kay Jewelers chains. And in 2012, Signet bought Ultra Stores, an outlet-mall franchise. Signet now has more than 1,400 stores in the U.S. and should be able to generate annual sales growth of at least 6% for the next few years, says Gregory Herr, co-manager of FPA Perennial Fund. The firm’s aggressive advertising—you’ve no doubt heard that “Every kiss begins with Kay”—will also help. The stock trades at 14 times projected earnings for the year that ends January 2015.

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For still more sparkle, indulge in Tiffany (TIF, $89). U.S. sales have lagged recently, so the 176-year-old company has been expanding its lower-priced sterling-silver collection to appeal to a broader customer base. “That end of the business is more profitable than $15,000 rings,” says Brian Yarbrough, an analyst at Edward Jones. In addition, the New York City company continues to expand overseas. Sales in Asia, excluding Japan, grew by a whopping 22% during the quarter that ended October 31. The stock jumped 9% on the day the earnings report was released, and now sells for 21 times projected earnings for the year that ends January 2015. That’s not a bargain price, but it’s reasonable given the strength of Tiffany’s iconic blue-box brand.

The business of turning the byproducts of pork, beef and chicken into biodiesel fuel and animal feed may not strike you as romantic. But although its business may be gross, Darling International (DAR, $21) is a company with a sweet name. Prices for corn have come down lately, and a proposed rule by the Environmental Protection Agency that would freeze mandates for biofuel supplies at 2013 levels could limit demand. All of that could cause headwinds for Darling in 2014. But the Irving, Tex., firm has started to expand internationally through recent acquisitions in Canada and the Netherlands—moves analysts think will help generate 35% earnings growth in 2014. Any turnaround in corn and fuel prices would further boost earnings.

Finally, it’s hard not to fall for Southwest Airlines (LUV, $19), the company with the market’s most heart-warming stock symbol. Like other airlines, Southwest shares have been on a tear—they’ve nearly doubled over the past year. A rebound in business travel has helped. But perhaps the best thing the industry has going for it is the recent spate of airline mergers. “Consolidation is healthy for all the airlines because they won’t have to continually lower fares to compete,” says Andrew Davis, associate director of stock research at T. Rowe Price. Moreover, Southwest’s CEO recently suggested that the airline may start charging for checked baggage. Imposition of those fees wouldn’t be good news for budget-minded fliers, but it would likely endear the company to investors.