The cost of raising a child is getting higher. A 2016 Suncorp report found the average cost is $297,600 from birth to 17 – which as Mamamia noted is the cost of a brand new Ferrari. Ouch.

Among the biggest expenses of raising children are childcare and education. Childcare costs have risen 80 per cent in 10 years. If you want to send your children to the best private schools, Sydney’s best have hiked Year 12 fees by over 25 per cent in just five years.

…and that’s before you consider the chaos a family can bring.

Even public schools don’t come cheap. The Good Schools Guide estimated parents pay $4,455 per year in education costs, such as textbooks and uniforms.

It goes without saying higher fees are better for the companies. But they are also good for shareholders.

In the last two years, a portfolio comprised of these childcare and child education stocks would have returned 76 per cent – almost the same as childcare costs have risen in 10 years.

CodeNamePrice (4 April)Market Cap2 Year Return (%)
KMEKIP MCGRATH EDUCATION CENTRES0.95$42.8M229
TNKTHINK CHILDCARE LTD1.7$102.8M-19
MFDMAYFIELD CHILDCARE LTD0.86$27.7M-18
3PL 3P LEARNING LTD1.04$147.7M8
RDHREDHILL EDUCATION LTD2.51$77.2M125
ICTICOLLEGE LTD0.05$27.9M62
AKGACADEMIES AUSTRALASIA GROUP0.39$48.5M147

 

Patience pays off…

If you’d held onto these stocks for longer, you could have enjoyed even greater returns. For instance, RedHill Education (ASX: RDH) has gained over 1900 per cent in 6.5 years.

While RedHill’s offerings are mainly tailored towards adults, especially international students, it counts Coder Academy among its portfolio, which runs programs specifically for school children.

Redhill Education (ASX: RDH) shares over the last nine years.

And KipMcGrath Education Centre (ASX: KME)? 4600%.

KipMcGrath Education (ASX: KME) shares over the last 15 years.

Kip McGrath’s success is particularly staggering because it offers private tutoring services above schools. Perhaps it can credit its expansion into education platforms, which can reach geographically-challenged students.

Among more recent gainers, iCollege (ASX: ICT) is another stock that serves mainly adults but some children. Two years ago, it acquired childcare services group Parenta that offers SaaS-based nursery management software, learning journals and mobile apps.

Its plans for the future include tapping into Afghanistan’s student market to help them with professional development.

Academies Australiasia (ASX: AKG) has more than doubled in two years. It offer courses that help students enter university, apprenticeships or further education. Among its owned institutions are the Academy of English in Sydney and RuralBiz Training in Dubbo.