10 Stocks Every Recent Grad Should Own

By Tim Lemke on 24 June 2016 1 comment

If you're just fresh out of college, you may be broke and not yet in a position to invest. But if you find a little extra cash, or are fortunate enough to be gifted some stock as a graduation gift, there are a number of great options that have a great track record of solid performance.

These are stocks that have rarely let investors down over the course of decades, and they often pay great dividends, too.

If there's a list of stocks that recent grads should consider owning, these 10 should be included.

Microsoft [Nasdaq: MSFT]

Bill Gates' old company made headlines recently when it bought the professional networking site LinkedIn. It's now a massively diverse tech firm with PCs, tablets and phones, software, and a popular video game system.

Coca-Cola [NYSE: KO]

Yes, we know that America is supposed to be moving away from sugary drinks. But this company has managed to sell a ton of Coke while diversifying its product line to include everything from Dasani water, to Powerade and Honest Tea. Coca-Cola shares have been in positive territory for eight straight years, and with a market cap of nearly $200 billion, it's likely a long-term winner.

Apple [Nasdaq: AAPL]

Shares of this technology company have dipped about 20% in the last year, but that's all the more reason to consider buying now. This is still one of the largest, most influential and inventive companies out there. Chances are, if you are a recent college grad, you use Apple products. So go with what you know, and reap the financial rewards. (Disclosure: I own some shares of Apple.)

Facebook [Nasdaq: FB]

Okay, full disclosure: I bought some shares of Facebook stock a while back, and I have no complaints. Shares are up more than 40% in the last year, as the company continues to bust through earnings predictions. Facebook has 1.65 billion active users, and the company could vault to new heights with recent investments into virtual reality. Social media may be a fad, but Facebook will be here to stay.

Procter and Gamble [NYSE: PG]

Do you wash your clothes and your dishes? Do you brush your teeth? Do you use paper towels? P&G sells products that people all over the world use every day. This is one of those stocks you can practically "set and forget" and see a very solid return nearly every year. A dividend yield of more than 3% doesn't hurt, either.

AT&T [NYSE: T]

Admittedly, this is not the most exciting stock in the universe. But it's reliable, with a good dividend and not much volatility. AT&T recently hit a 52-week high amid reports that it's bidding for some of Yahoo's assets. But any share growth is a bonus for this company that's now dishing out a 4.8% dividend yield. (Disclosure: I own shares of AT&T, gifted to me in the 1990s!)

Johnson & Johnson [NYSE: JNJ]

Like P&G, Johnson & Johnson is a dividend aristocrat, meaning that it has paid out and increased its dividend every year for 25 straight years. This is a big company that's neck deep in the growing health care sector, and it sells a lot of products, including shampoo, soap, and hand lotion, that people use all the time. JNJ shares are up 18% this year, and has had just 13 down years since 1975. A 2.7% dividend yield is also a selling point.

Wal-Mart [NYSE: WMT]

When you have revenue approaching half a trillion dollars (yes, trillion with a "t"), you are a company worth investing in. Wal-Mart does well when the economy is doing well and folks are spending money. Wal-Mart does well in slow economic times, when shoppers are looking for low prices. There is some concern about the long-term future of brick-and-mortar retail, but Wal-Mart right now has more than four times the revenue of Amazon.

Sysco Foods [NYSE: SYY]

If you've ever eaten at a restaurant, you've probably gotten food from Sysco. This is another dividend aristocrat that has seen shares rise 19% in 2016, while boasting a healthy dividend yield of 2.5%. It's been one of the most reliable stocks for decades, and people aren't going to stop eating at restaurants anytime soon.

Amazon [Nasdaq: AMZN]

The world's top online retailer can be frustrating, because founder and owner Jeff Bezos has always focused more on growing his company than worrying about profitability. Some shareholders got frustrated with Amazon and left last year, but now shares are up over $700, nearing an all-time high. In addition to massive online sales revenue, Amazon has made a killing from its web services subsidiary, which pulled in $604 million in profits last year. One of these days, all of Amazon's reinvestment will likely pay off with massive profits that will send shares to even bigger heights.

Have you ever been gifted (or given) shares? What stocks were they?

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Guest's picture
Paul Connolly

How the hell can a recent graduate afford stock with Amazon? My only assumption is that the stock is gifted to them. With most students averaging $30,000 in debt, I have no idea how some recent graduates could afford some of these stocks.

Tim Lemke's picture

Paul - I agree that it's hard to invest when you're tackling student loans. Certainly, getting gifted a stock is an ideal scenario. But if market returns exceed the interest on the loans, you may be OK investing rather than looking to pay off loans early.