14 Stocks for Beginning Investors in 2014
Millions of Americans are looking to get the New Year off to a solid start by getting their finances into shape. One way to boost your financial health is to make sure your money is getting the best returns possible. But with the stock market at record highs, you need to take extra care when buying them.
Of course, every stock has some risk. But below, you'll find 14 well-known companies whose stocks are ideal for novice investors.
1. Apple (AAPL)
Both Apple's stock and its reputation have rebounded in 2013. The release of the iPhone 5s and 5c this fall has successfully breathed new life into the popular smartphone line, while the iPad Air and new Mac and iPad mini products have helped Apple stay relevant amid competition from rivals. Even up 50 percent from its summer lows, Apple stock still looks like a bargain, with valuations much cheaper than the average for the stock market.
2. Colgate-Palmolive (CL)
The maker of Colgate toothpaste and Palmolive dishwashing soap isn't the largest consumer-goods company in the industry. But because it's much smaller than industry rival Procter & Gamble, Colgate gives investors more room for its stock to climb, especially as it works to capture more consumers in lucrative emerging-markets countries around the world.
3. General Electric (GE)
GE has been making money for investors for more than a century. While it may be better known for its light bulbs and appliances -- ubiquitous fixtures in American homes -- today's GE is a massive operation that makes everything from the engines that power the world's largest aircraft to enormous wind turbines that produce clean, renewable energy for millions of households around the world.
4. Microsoft (MSFT)
In many people's eyes, Microsoft has played second fiddle to Apple for years, with its smartphones and tablets failing to gain the popularity of iPhones and iPads. %VIRTUAL-WSSCourseInline-1049%But Microsoft's operating system and software businesses continue to generate ample cash, allowing it to pay big dividends. Meanwhile, its Xbox game console and its cloud-computing efforts represent big growth opportunities for shareholders.
5. Phillips 66 (PSX)
Oil refining isn't the sexiest business out there, but it has been a great way for investors to make money from the energy boom in the U.S. in recent years. Cheap crude from domestic wells has boosted Phillips 66's profits immensely, and with no signs of slowing production levels, the refiner could continue to benefit from getting bargain prices for the oil it needs to make gasoline, diesel fuel, heating oil, and other key products.
6. Sysco (SYY)
Not to be confused with its homophonous peer in the computer network industry, Sysco provides food for thousands of restaurants, hotels, hospitals, school dining halls, and other food-preparation facilities. The company dwarfs its competitors with its size and efficiency, and its recent merger with US Foods should only give Sysco even more dominance in the food-services niche.
7. Yum! Brands (YUM)
The Yum! name is far less well-known than the fast-food brands in its stable: Pizza Hut, KFC, and Taco Bell franchises are popular around the world. Yum! has struggled lately in its highly competitive industry, in part due to fears of avian flu in China hurting its KFC sales there. However, Yum! has started to rebound, and going forward, it's poised to give McDonald's (MCD) and its other rivals a run for their money.
8. Verizon (VZ)
The boom in smartphones, tablets, and other mobile devices has turned wireless network availability from a luxury into an essential, and Verizon is the leading wireless provider in the nation. %VIRTUAL-article-sponsoredlinks%Investors should take confidence from Verizon's big bet on itself recently: It spent $130 billion to buy out the 45 percent stake in its wireless division that Britain's Vodafone (VOD) owned. In addition to the potential growth from wireless, investors also get a dividend of more than 4 percent.
9. Starbucks (SBUX)
If you've ever waited in line for coffee, you know firsthand how many people make coffee giant Starbucks an essential part of their day. Even though the stock has risen tenfold since the financial crisis, it has further room to grow, as Starbucks has gone beyond coffee to bring in other concepts that include Teavana tea, Boulange baked goods, and Evolution Fresh juices.
10. PepsiCo (PEP)
PepsiCo might not have the top-selling cola in the world, but it has something that Coca-Cola (KO) doesn't: a profitable snack business to go with its beverage offerings. That combination has helped PepsiCo grow significantly in recent years, and it also provides some protection for investors from concerns about the impact of sugary soft drinks on the obesity epidemic and other health conditions. Moreover, CEO Indra Nooyi helped pioneer moves toward healthier offerings, giving PepsiCo a head-start over its rivals.
11. Google (GOOG)
The company whose name is synonymous with online search continues to rule over its competition. Efforts to broaden its empire with its popular Android mobile operating system, and its acquisition of online-video giant YouTube have given Google even more growth opportunities for the future. Google has even started making substantial money from mobile ads, a trick that has confounded many of its competitors.
12. Disney (DIS)
Investors of all ages know the Disney name, with its vast film empire going back 90 years. Over time, though, Disney has come to mean much more, with its theme parks drawing millions of visitors each year, its media presence bringing ABC and ESPN to audiences around the world, and its retail stores taking advantage of the vast marketing prowess the company has to promote lucrative branded products. In particular, the combination of Pixar, Marvel, and Lucasfilm could be the biggest growth engine for Disney's future, with cross-platform opportunities that could bolster Disney's presence in movies, television, and other types of content that haven't even been conceived of yet.
13. Chevron (CVX)
As the second biggest U.S. oil company, Chevron gas stations are nearly everywhere. But Chevron's biggest money-makers are far from your corner store: It has huge offshore natural-gas fields off the coast of Australia and operations in the Gulf of Mexico and off the Brazilian coast holding great promise. If you're tired of paying through the nose for gas, owning Chevron lets you claim some of those profits for yourself.
14. Altria Group (MO)
Tobacco stocks can be a controversial buy, but if you don't object on social-responsibility grounds, Altria's premium Marlboro brand and strong market share overall give the company a key edge over many of its rivals. Recognizing the steady drop in traditional cigarette sales, Altria recently moved forward to offer its MarkTen brand of electronic cigarettes, with hopes of supplementing its existing revenue sources. Shareholders benefit from a large 5 percent dividend yield.
Don't Wait Another Minute
If you want your 2014 to start off right, don't wait another minute to start investing. You shouldn't expect 2014 to repeat 2013's stellar performance, but over the long haul, stocks will almost certainly beat out the next-to-nothing rates you'll find with most bank accounts.
You can follow Motley Fool contributor Dan Caplinger on Twitter @DanCaplinger or on Google+. He owns shares of Apple and Walt Disney. The Motley Fool recommends Apple, Chevron, Google, McDonald's, PepsiCo, Starbucks, Sysco, and Walt Disney. The Motley Fool owns shares of Apple, General Electric, Google, McDonald's, Microsoft, PepsiCo, Starbucks, and Walt Disney.