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As a beginner, stock investing may seem intimidating, but with the right skills and knowledge, anyone can learn to invest, irrespective of experience or age. To build a strong corpus, it is important to start young, and the best way to develop an interest in investing in children is to choose stocks for them. It will teach investment to your children, and they will also learn about personal finance, budgeting, money management, and the types of investment options. Warren Buffet bought his first stock at 11! So, it is never too early to start investing for your kids.
Several kid-friendly stocks can give you a chance to earn money while you are in middle school. Kids can invest in the stock market but it is important to have an adult guiding them. You can open a custodial account for your child and gift them up to $18,000 per person per year or $36,000 per couple per year to invest in NYSE or NASDAQ.
When choosing the best stocks for kids, you should include companies they know about. It could be the companies they have heard of or bought products from. You also need to ensure that the stocks stand the test of time and will generate consistent returns over a long period of time.
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In this article
Overview of the best stocks for kids
Company | Best For |
Walt Disney Company | Ideal stock for the decade |
Apple Inc. | Largest company in the world |
Amazon | The best large-cap stock |
Alphabet | Retirement stock |
Tesla | Huge growth potential |
Meta Platforms | Social media powerhouse |
McDonald’s | Low-risk, consistent return |
Netflix | Biggest streaming giant |
Nike | Capital appreciation |
Coca-Cola | Top dividend stock |
Hasbro | Dividend stock |
Best Stocks For Kids
Walt Disney Company
Children of all ages are aware of the Walt Disney Company, and buying the stock for your child will ensure they become buy-and-hold investors for life. The company suffered more than it deserved to during the pandemic, and it is slowly recovering. Experiences revenue is growing, and it is making money from the streaming business. With theme parks opening and park trips growing, the company saw a massive improvement in revenue.
Walt Disney reported its first loss in four decades because of the pandemic but picked pace and reported revenue growth quickly. In the recent quarter, revenue growth was reported at 1.2%. The company owns a business that will never go out of demand. We still want to watch Disney classics, and your children still want to visit the theme parks. The biggest advantage of investing in Disney is its wide product portfolio.
The company can weather the storm and bounce back with a diversified business spread across different areas. The Disney+ business is growing in huge numbers, and this is only the beginning. No matter your age or experience, Disney stock will reap strong returns.
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Apple Inc.
Unless your child is an infant, they would have come across at least one device from Apple. The largest company in the world, with a market cap of over $3 trillion, Apple is a premium brand and is highly recognizable. The company designs and manufactures software and hardware and offers services that work together.
It has grown with time and gone beyond the phone or tablet. Today, you can also find AirPods, AirTags, and computers from Apple. This means you can expect a lot from the company over the next decade. It is significantly growing and expanding its product portfolio.
Known for innovations and cash dividends, Apple stock is an ideal addition to your kid’s portfolio. The company is a long-term investment and could dominate the market in the coming years.
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Amazon
Choosing the best stocks for kids means looking for companies you cannot imagine the next decade without. Do you think you can live without Amazon? The pandemic has already gotten us used to online shopping and home deliveries of essentials. This is where Amazon dominates. It is a big part of the retail world and the one-stop shop for everything you want.
Its stock price proves how well the company has grown and evolved. It has gone from $1.50 in 1997 to $195 today. Amazon is not going anywhere and will only grow its presence in our lives. It is just too big to fail. The company has a diversified business with many opportunities to enter the new market and cater to a wider audience.
Amazon is expanding through Amazon Web Services and Prime service and is well-seated in the industry. The company is known for constantly innovating, which has set high customer expectations. Without them, we wouldn’t watch our favorite shows or enjoy free next-day shipping.
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Alphabet (Google)
Alphabet, better known as the parent company of Google is one of the top companies in the world and your child is going to love Google. It owns the two leading search engines, YouTube and Google Search. This is another stock worth considering if you are keen on investing from a young age. Whatever information you are searching for, simply type into the browser or your phone and Google will have an answer for you.
It enjoys a dominant position in the market and continues to grow. It has gained a massive market share in the Cloud business, but remember, this is only the beginning. The company will grow in terms of market value over the coming years.
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Tesla
All children love cars but their love will grow manifold when they hear about Tesla! A pioneer in the electric vehicle industry, Tesla has brought sustainable energy solutions to the world. It manufactures electric vehicles and batteries and has also partnered with a company that manufactures solar panels for homes.
Tesla is not just about cars. It is a company that supports renewable energy, and its founder, Elon Musk, advocates sustainable practices that are popular with younger generations. As the company continues to grow, it is investing in products that have the potential to revolutionize the way we transport across long distances.
It is important to keep one thing in mind: the stock price of Tesla will fluctuate, so investing a lot of money in it may not be a good idea. You can buy low and hold for some time and then sell high. The automobile industry's future is electric, which means massive opportunities to grow and expand.
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Meta Platforms
Meta Platforms, the parent company of Facebook, has become a household name today. The company debuted on the market about 12 years back and has grown. It has become one of the most valuable companies today, with a stock price of $499 and a market cap of over $1.30 trillion. The company has dealt with a lot of controversies in the past, but this does not speak anything about its future.
With a wide portfolio of social media platforms, Facebook certainly has a long way to go. It accounts for much of your kid's screen time through Instagram. For children or adults, Facebook has become the most used app for all of us, and data shows that this may not change anytime soon. Owning a piece of the company could help generate strong returns in the long run.
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McDonald’s
If your kids are also hooked on burgers and fries from McDonald’s, it is time to make them investors in the company. McDonald’s has steadily grown over the past year despite the market turmoil and high inflation. It shows that with inflation or recession, we sure love our burgers.
McDonald’s is a hot stock for the juicy dividends. The company has consistently raised the dividend payout for the last 47 years, with a dividend yield of 2.67%. Dividend reinvestment could generate significant income for your kids when they grow up.
Netflix
A great stock to buy, Netflix has dominated our free time for the past few years. It provides media and video streaming services through a library of TV series, movies, and documentaries. If you have a teenager at home, they will certainly be hooked on Netflix. Gone are the days of traditional TV channels; with Netflix, we have hundreds of options to choose from.
The app has more than 269 million users worldwide, and its services are available in 190 countries. The king of content, Netflix churns award-winning shows year after year and has remained in the top spot by investing in original content. It offers content that appeals to everyone in the family.
After the pandemic, Netflix has become very important in our lives, and the company has gained massive popularity with time. Investing in the company will expose your child to the trend of on-demand entertainment. It could pay off in the long run if the active users continue to grow. Netflix does have a lot of competition in the industry, but for now, it is sitting at the top, and the management will do everything to maintain this position.
Nike
Known for athletic shoes, sports performance gear, and clothes, Nike is a popular brand with young people. If your kids follow sports and admire athletes, they will know the brand. Nike is all about innovation, and they launch new product lines regularly. It is a kid-friendly brand ideal for the younger generation.
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The company has been around since 1964 and has generated massive revenue. Nike has massive growth potential and is currently trading at a discount. If your kids want to buy shares of stock that meet their interests in sports, then Nike may be a good choice for you.
Coca-Cola
The world’s largest beverage company, Coca-Cola, is one of the top brands in history. With an extensive portfolio of nonalcoholic beverages, including juices, teas, and coffees, Coca-Cola has a lot to offer. Many young kids love their products and buy them from vending machines while traveling and cool down on a hot summer day.
Even if you prefer your kids drink healthier products, you can invest in Coca-Cola stock for long-term gains. It is also a dividend stock with a dividend yield of 3.06%. The stock is the one to own and hold for the long term as it will continue to generate passive income.
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Hasbro
The pandemic brought back board games, and they will continue to stay with us. We have rediscovered the fun of playing games with our family, and Hasbro stock can be a winner for your kids as you pass the time.
The company manufactures board games and GI-joe figures. It has had good and bad days this year, but there are many reasons to consider the stock for the long term. Hasbro generates massive revenue from toys but has also invested in digital entertainment.
It has licensing agreements with Disney to make toys based on the franchises. The company has a solid dividend yield of over 4.5%, which means you can enjoy passive income over the years. It's a slightly risky pick, but one your kids will love to own.
Best stocks for kids summary
Company | Ticker | Market Value on July 1, 2024 | Dividend yield as of July 1, 2024 | 52-Week Low-High |
The Walt Disney Company | DIS | $98.45 | 0.76% | $78-$123 |
Apple Inc. | AAPL | $215.92 | 0.46% | $164-$220 |
Amazon | AMZN | $196.85 | NIL | $118-$199 |
Alphabet Inc. (Google) | GOOGL | $184.31 | 0.43% | $115-$187 |
Tesla Inc. | TSLA | $210.03 | NIL | $138-$299 |
Meta Platforms (Facebook) | FB | $500.74 | NIL | $274-$531 |
McDonald’s | MCD | $250.62 | 2.67% | $245-$302 |
Netflix | NFLX | $672.24 | NIL | $344-$689 |
Nike | NKE | $75.03 | 1.97% | $74-$123 |
Coca-Cola | KO | $63.39 | 3.06% | $51-$64 |
Hasbro | HAS | $57.80 | 4.84% | $42-$73 |
FAQs
How do I invest in stocks for my kids?
While you can invest through an online brokerage account, you will need a custodial account for investing for your children. One is the Uniform Gifts to Minors Act (UGMA) which allows you to be a custodian and invest in assets like stocks, ETFs, bonds, mutual funds, and other securities. The other option is through Uniform Transfer to Minors Act (UTMA) which is a custodial account and can be used in different ways including alternative investments. You can also use the account to store items like valuable art collections and property deeds.
Is it safe to open an account for my kids?
It is safe to open a custodial account for your children. You can track the performance of the portfolio and make investment decisions accordingly. Individuals can contribute up to $18,000 and $36,000 for a married couple filing jointly to the account without incurring the federal gift tax. The account will be transferred to your child once they attain maturity.
How can I teach my child about investing?
Besides investing for your child, you can teach them money management and investment through books. Gift your child books that teach about the stock market.
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The bottom line
These companies have a solid financial positioning and will continue to perform for years while generating passive income for you. They have existed for many years and will continue to be a part of our lives. Investing in stocks for kids can also allow you to connect with your kids and talk to them regularly.
There are many kid-friendly stocks, and they are solid investments for when your child grows up. It will give you peace of mind knowing that you have invested well and taught financial literacy to your child from a young age.
Young investors need to keep in mind that the stock market is volatile, and you will see stocks going up and down. Do not panic or make decisions based on a dip or a high. Choose stocks for the long term and hold them throughout the phases of volatility.
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Editor
Vandita Jadeja is a financial writer and editor at Joywallet. She loves to read and write about money and brings a decade of experience from the financial industry.
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