The holidays are upon us and what are you going to give your children or grandchildren? Have you considered stocking stuffer stocks? That is to say have you considered giving a few shares of stock every year to your special grand child to get them started early on the road to investing? If you are going the stocking stuffer stocks route what stocks should you pick? The point is to choose a secure investment, as close to buy and hold as you can find, and let the stock appreciate and the dividends reinvest over the years. With great dividend stocks in mind here are the 3 best dividend stocks for beginners from the viewpoint of The Motley Fool.
FREE MASTERCLASS: 3 Secrets to Take Control of Your Financial Future!
Dividend investing can add significantly to returns over a lifetime, so beginner investors are right to want to own some dividend-paying stocks in their portfolios.
Plenty of stocks offer enticing dividend yields, but have businesses that are floundering, and because of that, it makes more sense to focus on the health of a company first and the dividend yield second. Using that approach, one of my favorite dividend-paying stocks is Microsoft (NASDAQ:MSFT).
For investors that are looking for their first dividend stock in the energy & materials space, Exxonmobil (NYSE:XOM) is a great place to start. Its vertically integrated business model helps to offset the cyclical nature of the oil and gas industry. When oil prices are high, its production business segment does well while typically its refining and retail segments suffer and vice versa when oil prices are low.
Beginning dividend investors typically want to play it safe by investing in well-known dividend stocks with a proven track-record of dividend payments over the long term. With this in mind, a rock-solid dividend powerhouse such as Procter & Gamble (NYSE:PG) could be a smart choice for those giving their first steps in dividend investing.
These are three solid choices for stocking stuffer stocks as they will be around and paying dividends when your grandchild grows up.
Picking Growth Stocks for the Holiday Stocking
Biotech and pharmaceuticals are growth areas due to the continual development of new technologies and products in this area. 24/7 Wall Street suggests top biotech stock picks for the coming year.
Biotech looks set to close out 2015 as its worst performing year since 2008. That may sound bad, but despite this, the iShares Biotechnology Index ETF (NASDAQ: IBB) is still up over 11% year to date. Not bad for a relatively bad year.
Their first specific stock pick is one of our favorites, Roche.
Roche, which is traded over the counter, is a staple of any diversified biotech portfolio. At $229 billion in market cap, its stability and dominance are as rock solid as you can get in the sector. What makes Roche an especially interesting choice for 2016 though is the new technology it got access to via a partnership with private firm SQZ Biotech for $500 million.
The technology is quite simple conceptually. It’s called CellSqueeze, and what it does is force blood though a capillary so tiny that it squeezes the cell membranes so they become porous. While in the capillary tube they can absorb any other molecule put in there together with it. What Roche and SQZ are trying to do is get immune cells in the blood to absorb certain cancer markers that will enable them to recognize tumors and destroy them. Preclinical studies show that this method is much more effective than any other known method of opening up cell membranes, in terms of the number of cells it can implant and that survive the process.
Are we looking at a potential cure for cancer? Roche is a solid company and still a growth stock in a vital market sector. Consider this as one of your stocking stuffer stocks.
Gifts of Stocks and Gifts of Knowledge
Investopedia suggests 10 books every investor should read. For the not quite so young child or grandchild an early education in the basics of investing may be worth more than all of the stocking stuffer stocks you can offer.
There are several classic books on investing that make for great reading. Here we give you a brief overview of our favorite investing books of all time and set you on the path to investing enlightenment.
The suggested stocking stuffer investing books are as follows:
- “The Intelligent Investor” (1949) by Benjamin Graham
- “Common Stocks And Uncommon Profits” (1958) by Philip Fisher
- “Stocks For The Long Run” (1994) by Jeremy Siegel
- “Learn To Earn” (1995), “One Up On Wall Street” (1989) or “Beating The Street” (1994) by Peter Lynch
- “A Random Walk Down Wall Street” (1973) by Burton G. Malkiel
- “The Essays Of Warren Buffett: Lessons For Corporate America” (2001) by Warren Buffett and Lawrence Cunningham
- “How To Make Money In Stocks” (2003, 3rd ed.) by William J. O’Neil
- “Rich Dad Poor Dad” (1997) by Robert T. Kiyosaki
- “Common Sense On Mutual Funds” (1999) by John Bogle
- “Irrational Exuberance” (2000) by Robert J. Shiller
These books, starting at the top, are excellent sources of knowledge for beginning investors and great stocking stuffers for adult investors as well.