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7 Stocks That Your Grandchildren Will Be Glad You Bought for Them – InvestorPlace

The top 7 stocks to buy for your grandchildren could end up being a gift that keeps on giving

This holiday season, you might want to consider buying stocks for your grandchildren instead of the types of gifts you would normally give them. Doing so can be the gift that keeps on giving in more ways than one.

First, gifting stocks to your grandchildren is a great way to teach them about personal finance and investing. Knowledge about these topics from an early age will give you an edge over other students. It can also help lay the foundation for financial success and prosperity as an adult.

Second, in addition to imparting wealth-building wisdom, the stocks you buy them today can actually generate significant wealth decades from now.

By purchasing blue-chip stocks with a track record of high returns and dividend growth, you can help your grandchild build a portfolio that will generate high total returns over the long term.

So what are some examples of the best stocks to gift your grandchildren? Consider these seven. All of them fit well into the aforementioned criteria.

Automatic data processing (ADP)

Source: IgorGolovniov / Shutterstock

gift of automatic data processing (NASDAQ:ADP) may be able to teach their grandchildren the exciting silver lining of investing in high quality “boring” stocks. This leading payroll and managed HR services provider has been a good investment for long-term shareholders.

Over the past 10 years, ADP stock has risen more than 226%; S&P500 (NYSEARCA:spy), up 151.25% during the same period. Indeed, as is often said, past performance is no indication of future returns. Returns over the next 10 years may not match or exceed returns over the past 10 years.

Still, as I pointed out last month, earnings forecasts call for the company to report around 9% to 10% revenue growth over the next few years. Coupled with ADP’s 2.43% dividend (which has averaged double-digit growth each year for the past five years), ADP still has strong potential to deliver market-beating returns.

Broadcom (AVGO)

Broadcom (AVGO) logo outside an office building

Source: Sasima / Shutterstock.com

Looking for AI stocks to buy for your grandchildren? broadcom (NASDAQ:AVGO) can be a great alternative to other popular AI plays such as Nvidia (NASDAQ:NVDA) and microsoft (NASDAQ:MSFT). But why Broadcom?

After a strong 2023 performance, the upturn from the rise of generative AI and other artificial intelligence applications may already be firmly factored into NVDA and MSFT’s valuations. AVGO stock has risen significantly this year (67.26%), but this long-term growth trend could make this semiconductor and infrastructure software company’s stock jump even further in the future.

recently Long-awaited acquisition completed of vmwareBroadcom is currently working to make it happen. Billions in potential cost and growth synergies It was identified at the time of the merger announcement. Add to this the growing AI-related demand for chips and infrastructure software, and AVGO’s stock price could rise significantly over the years.

Alphabet (GOOG, GOOGL)

The Alphabet Inc. (GOOG, GOOGL) and Google logos will appear on your smartphone.  Google's stock split will take place today.

Source: IgorGolovniov / Shutterstock.com

Parent company of Google and YouTube alphabet (NASDAQ:googleNasdaq:Google) is not only one of the “fun” stocks your grandchildren might like. The company’s main search advertising business, which is a blue-chip among high-tech stocks, has created a deep competitive moat. Concerns that the rise of ChatGPT will reduce Google’s market share could be wrong.

Like AVGO, GOOG stock is well exposed to this trend when it comes to AI.with Louis Navellier investor place Research staff recently noted that Alphabet is making serious strides in its AI efforts, and 2024 could even be the company’s “Year of AI.”

Continued dominance in search advertising, further growth in the cloud computing sector, and further AI-related advancements could help the company continue to see medium-high growth. As a result, GOOG can earn many times more profits in further rounds, and your grandchildren will appreciate the profits.

Lockheed Martin (LMT)

Close up top view of Lockheed Martin (LMT) F-35C Lightning II with afterburners on

Source: ranchorunner / Shutterstock.com

lockheed martin (New York Stock Exchange:LMT) is also a defensive stock. defensive stockor stocks that generate stable profits and pay consistent dividends, whether the economy is booming or in the face of recessions and recessions.

This resilience allows stocks like LMT stock to generate stable and satisfying total returns. In the past 10 years the stock price has risen more than three times. Similar to ADP, forecasts strongly suggest that LMT will continue to be a rich compounding machine.

rising global tensions This bodes well for Lockheed Martin’s long-term earnings growth. This shows that LMT continues to grow its dividend in the high single digits (2.81% forward yield). Because of this stock’s compounded total return, a modest gift of stock today can become worth a small amount over time. For this reason, consider it one of the best stocks to buy for your grandchildren.

MasterCard (MA)

Close up of a pile of mastercard credit load debit bank cards.

Source: David Cardines/Shutterstock.com

Some grandparents give to their grandchildren master Card (New York Stock Exchange:Ma) branded gift cards, but shared with this credit card processing giant or its main competitors. visa (New York Stock Exchange:V) might be a much better gift.

What makes MA and V stocks the best stocks to gift your grandchildren? Both stocks have performed well over the past decade, with above-average returns thanks to one key trend. There’s a good chance you’ll get it. As we talked about recently, both Mastercard and Visa stand to benefit greatly from the switch from cash to digital payments.

Assuming this trend continues and leads to further earnings growth in the 15% to 20% range, the stock prices of both companies are likely to continue rising in parallel with this growth. When compounded over 10, 20, or more years, investing in either or both stocks could help your grandchildren build considerable wealth.

Roper Technologies (ROP)

Software stocks: Coding software developers work with augmented reality dashboard computer icons for scrum agile development, code forking, versioning with responsive cybersecurity.

Source: Shutterstock

your grandchildren may not know roper technologies (NASDAQ:ROP), much less the company’s vast portfolio of subsidiaries that provide applications software, network software, and technology-enabled products to businesses.

Nevertheless, consider ROP stock “hidden in plain sight” to be one of the best stocks to buy for your grandchildren. Many investors like Roper Technologies stock because of its Dividend Aristocrat status. To become a Dividend Aristocrat, a company must increase its dividend for at least 25 consecutive years. ROP satisfies this requirement. ROP dividend increased 31 consecutive yearsthe recent hike represents a 10% increase.

But while ROP’s small but growing dividend (forward yield 0.56%) slightly boosts total returns, Roper looks most attractive thanks to its expected annual earnings growth rate, which It is the possibility of continuing compound interest at a higher level. Less than 10%.

UnitedHealth Group (UNH)

UnitedHealth (UNH) headquarters in Minnetonka, Minnesota.

Source: Ken Wolter / Shutterstock.com

united health group (New York Stock Exchange:UNH) is another well-known stock that could make a great stock gift for your grandchildren because of its long-term growth potential. As noted previously, UNH has strong potential to continue his double-digit earnings and dividend growth.

To be sure, some people may be skeptical about whether the above-average growth will continue. We acknowledge that it will be difficult to generate above-average growth given the company’s current size and scope. While UNH stock is best known as a health insurance stock, keep in mind that UnitedHealth Group has diversified into the rapidly growing healthcare sector.

as investor place A good example of this is UNH’s continued expansion of its presence in the home health and hospice care markets, as Will Ashworth recently pointed out.In addition to these efforts, we are also implementing the following initiatives: Stock buybackcould go a long way in helping UNH continue its rise at a double-digit clip.

On the date of publication, Thomas Neal did not have (directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer and are influenced by InvestorPlace.com. Publishing guidelines.

InvestorPlace.com contributor Thomas Niel has been writing single-stock analysis for the web-based publication since 2016.

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