As the eighth year of this remarkable bull market rolls on by, choosing stocks for beginners is a challenging endeavor. One reason for the challenge is that, according to many experts, it’s more likely that the stock market will fall, than surge, in 2018.
Despite the prediction of a cloudy 2018 stock market future, savvy investors might uncover a stock that will outperform the rest. Check out these stocks for first-time investors.
Best Stocks for Beginner Investors
When you don’t have much or any experience in investing, getting started can be intimidating. But, don’t let that keep you from pursuing your goals. You can visit any discount broker to learn how to buy stock.
When you start, remember to maintain a long-term perspective when investing in stocks, and avoid using funds you’ll need within the next five to seven years. Here are 15 stocks for beginners to try:
1. Verizon (NYSE: VZ)
Verizon and its subsidiaries offer communication, information and entertainment products and services worldwide. The company mantra that “better matters” underscores its goal of putting the customer first.
With a price increase this year over 2016, the juicy yield makes it a good beginning stock pick for investors.
2. General Electric (NYSE: GE)
As an industrial leader with high-value global franchises, it’s no wonder GE still remains relevant after well over a century of existence. GE shows no signs of slowing growth as it continues to invest in areas such as additive manufacturing and digital technology. And, to top it off, GE has paid a dividend for more than 100 years, which makes it a reliable pick for beginning investors.
3. Merck & Co., Inc. (NYSE: MRK)
Another good choice to start stock trading for beginners, this healthcare stalwart offers a fat dividend payment. The company has both therapeutic and preventative treatments for heart disease, Type 2 diabetes, asthma, HIV, fungal infections, high blood pressure, arthritis and more. Founded in 1891, Merck & Co. stays current by tackling major healthcare concerns today.
4. International Business Machines Corp. (IBM)
Market cap: $137.09 billion
Year-to-date change: -4.07 percent
2016 annual revenue: $79.92 billion
2016 net income: $11.87 billion
Dividend yield: 6.00 (4.11 percent)
Founded in 1910, IBM is considered a mover and shaker in the tech sector today. The company has its hand in information technology outsourcing, integrated tech and cloud and technology support services.
For the global business customer, IBM provides consulting for all sorts of technology-related systems, as well as the vast software segment and the new artificial intelligence component, Watson. For beginning investors looking for a forward-thinking company, IBM is one to consider.
5. Tractor Supply Company (NASDAQ: TSCO)
Market cap: 7.45 billion
Year-to-date change: -21.74 percent
2016 annual revenue: $6.78 billion
2016 net income: $437.12 million
Dividend yield: 1.08 (1.77 percent)
Despite a double-digit price drop this year, Tractor Supply is a retailer with an important specialty niche focused on farm animal supplies, truck and tool products, and seasonal farm-related goods. With 1,600 retail stores in 49 states under the Del’s Feed & Farm Supply, Petsense and Tractor Supply Store monikers, this store is crucial to farmers, ranchers, tradesmen and small businesses. A plus is that Amazon is unlikely to penetrate this market soon.
Perform stock analysis on TSCO if you’re seeking entry into a unique retail sector.
6. Intel (NASDQ: INTC)
Market cap: $186.40 billion
Year-to-date change: 8.74 percent
2016 annual revenue: $59.39 billion
2016 net income: $10.32 billion
Dividend yield: 1.09 (2.78 percent)
Since before the turn of the century, Intel — which designs, manufactures and sells computer, networking and communications platforms across the globe — was synonymous with tech. Since the last recession, Intel’s share price has steadily risen. Although smaller tech stocks have outperformed Intel recently, patient investors on the path to building wealth might be rewarded by holding this high-yielding, fairly-valued tech stock.
7. Xperi (NASDAQ: XPER)
Market cap: 1.124 billion
Year-to-date change: -39.5 percent
2016 annual revenue: $259.56 million
2016 net income: $56.08 million
Dividend yield: 0.80 (3.52 percent)
Another Silicon Valley technology company fallen on hard times might be suitable for beginning investors with a high-risk tolerance. Xperi is in the audio, computational imaging, semiconductor packaging and interconnected technologies business, worldwide. The company, formerly known as Tessera Holding Corporation, was founded in 1990 and has a smaller market capitalization than some of its older tech peers.
As sometimes occurs when companies miss earnings, the share price has fallen this year. Should the tech sector continue its growth, Xperi might just be a stock to study in 2018.
8. Anadarko Petroleum Corporation (NYSE: APC)
Market cap: $26.78 billion
Year-to-date change: -31.32 percent
2016 annual revenue: $7.87 billion
2016 net income: -$3.07 billion
Dividend yield: 2.31 (4.88 percent)
Since its peak in 2014, Anadarko has been slipping, along with other oil industry players in the stock market. Even so, Anadarko has an optimistic future, both as a member of the oil and gas exploration sector and on its own, according to a recent Zack’s Research report.
International in its reach, Anadarko Petroleum Corporation is involved in the exploration, development, production and marketing of oil and gas properties. At the end of 2016, the corporation had approximately 1.7 billion barrels of oil reserves and a solid balance sheet.
9. Proctor & Gamble Co. (NYSE: PG)
Market cap: $237.25 billion
Year-to-date change: 10.50 percent
2016 annual revenue: $65.3 billion
2016 net income: $10.5 billion
Dividend yield: 2.76 (2.99 percent)
When learning how to invest in stocks, P&G is a good place to start. Founded in 1837, this multibillion-dollar company owns some of the world’s most well-known brands including Gillette, Olay, Oral-B, Vicks, Mr. Clean, Swiffer, Charmin, Luvs and more. P&G consumer products are found in North America, Europe, Asia Pacific, India, the Middle East, Africa and Latin America.
10. Coca Cola (NYSE: KO)
Market cap: 196.97 billion
Year-to-date change: 8.66 percent
2016 annual revenue: 41.86 billion
2016 net income: 6.53 billion
Dividend yield: 1.48 (3.21 percent)
Founded in 1886, Coke is known across the globe. The company is poised to be a member of the “dogs of the DOW” for 2017, which is one of 10 of the 30 companies in the Dow Jones industrial average with the highest dividend yield.
Despite 8.66 percent share price growth this year, Zacks claims the firm has underperformed the beverage industry as sales abroad have slowed. Yet, Coke is upping their marketing efforts and improving growth across the U.S.
11. Wal-Mart Stores, Inc. (NYSE: WMT)
Market cap: $258.75 billion
Year-to-date change: 25.10 percent
2017 annual revenue: $485.87 billion
2017 net income: $13.64 billion
Dividend yield: 2.04 (2.57 percent)
With its solid growth during 2017, Wal-Mart remains a worthwhile stock to investigate. After all, buying what you know is a sound strategy for beginner stocks — and who doesn’t know Walmart? The retail giant operates stores in 28 countries.
As a financial strategy, the company is leveraging its physical presence by focusing on store remodels — instead of new store openings — while it continues to invest in digital experiences. Plus, a variety of analysts are enthusiastic about Wal-Mart’s future. Due to the 25 percent gain this stock has experienced this year, however, you might want to wait for a price drop before jumping on board.
12. First Republic Bank (NYSE: FRC)
Market cap: 14.98 billion
Year-to-date change: 2.13 percent
2016 annual revenue: 2.38 billion
2016 net income: $673.42 million
Dividend yield: 0.68 (0.67 percent)
First Republic spun off from Bank of America in 2010. At the end of 2016, First Republic had 74 offices, predominantly located in wealthy U.S. communities. With interest rates remaining historically low, First Republic is on track to continue growing its lending arm as wealthy customers buy real estate and take out large mortgages.
13. Celgene Corporation (NASDAQ: CELG)
Market cap: 106.76 billion
Year-to-date change: 17.13 percent
2016 annual revenue: 11.23 billion
2015 net income: 2 billion
Dividend yield: none
Celgene manufactures drugs to treat myeloma arthritis, psoriasis and more. The company’s flagship drug, Revlimid, influences the immune system to counteract cancer and has made Celgene a big player in the fight to eradicate the disease. Sales of the drug are expected to reach $21 billion by 2020 — close to a 100 percent increase from 2016.
Such explosive growth should expand the company’s revenues and earnings and, subsequently, its stock price in the next several years. As with any stock purchase, don’t forget there’s investment risk, and stock prices might fall as well as increase.
14. Dollar Tree (NASDAQ:DLTR)
Market cap: 21.67 billion
Year-to-date change: 17.96 percent
2017 annual revenue: 20.72 billion
2017 net income: 896.2 million
Dividend yield: none
Dollar Tree has both positive and negative factors in its future. On the negative side, the company has encountered some difficulty integrating its 2014 purchase of Family Dollar, but it has had an impressive 37 quarters of increasing same-store-sales growth — and earnings are continuing to see steady growth. If you’re considering investing in Dollar Tree, be aware that the stock rebounded in price since earlier in the year, making it more expensive to buy.
15. Knoll (NYSE: KNL)
Market cap: 954.83 million
Year-to-date change: -30.09 percent
2016 annual revenue: 1.16 billion
2016 net income: 82.08 million
Dividend yield: 0.60 (3.17 percent)
This best-in-class office furniture maker looks like a buy in an overvalued stock market. And, with a generous 3.17 percent dividend, you can be comfortable with the income payments.
Despite recent stock price declines, hurt by the new trend in open-office concepts, this company offers a desirable product in the office furniture market. Overall, this smaller capitalization niche market company could be a winner for beginner investors, with a long-term horizon.
When studying how to buy stocks for beginners, learn about researching individual companies, study the firm’s financial statements and understand the future growth drivers. Finally, don’t expect every stock pick to be a winner.