How is it going today guys
So today we are gonna be talking about what are the best stock for beginners to invest in
Now before I get into the video what's kind of cool is that I just got a new tripod so before when I was moving around
And I just practice like I moved around a ton and it didn't shake at all so hopefully all that shakiness is gone now
I'm trying to continually upgrade my equipment as I go here so that should be an improvement
So let me know what you guys think hopefully there's no shakiness to the video but I'm basically going to outline
What you should look for as a beginning stock market trader what the best stocks are for you and then give you five stocks
That I might recommend for beginners now obviously you have to make your own decisions with investings
So I'm not telling you to go buy this stocks but this would be five stocks that if I was just getting started out
And I was looking to invest in some dividend stock I would highly consider these five right here
But basically as a beginner you want a low-risk investment just to get your feet wet I know a lot of people have the enticement of the penny stocks
And stuff like that and they say oh but they're so cheap I'm getting many more shares for my money
But it just doesn't work that way guys you can invest in whatever you want to I mean that's the beauty of trading
You can go buy whatever you want but I would much rather see somebody invest in a dividend stock
And over a couple of years have a nice return and they have a positive experience with investing
Then see someone invest in a penny stock and loose their shirt and then say investing is a loosing game
And never invest in stocks again so I would rather see someone invest in one of these blue chip stocks basically
And I'm gonna explain what it is, this is a very basic video so to some this may be like no brainer but just to cover all the bases in case of
This is a complete beginner watching this video but the best option is usually a blue chip stock that pays a dividend
So what is a dividend, a dividend is a sum of money paid quarterly to shareholders it's a method of profit sharing
So if a company is turning a profit you get a percentage of their earnings in a form of a dividend and then a blue chip
This refers to a large well established and financially stable company that's actually named after the blue chip in poker
Being the most valuable chip and these are the market leaders for the household name so the big companies
That you hear about for example apple's on this list apple is a big one, coca cola those are like the blue chip stock
Blue chip stocks are typically slower moving than growth stocks but the idea with this is there's a lot less risk
So for a beginner these are perfect dividends are paid to reward investors and to keep them around
So since these stock don't generally have explosive moves where they go up crazy in value
The dividends are nice because it's a nice little cash payment each quarter that kind of keeps the investors happy
And it keeps them sticking around and making their money invested in that stock
Now what's interesting too is that investors often flee to blue chips in times of uncertainty due to the stability of these stocks
And before I get into the first two stocks I have a little note here of stocks to avoid
And this is just based on my own personal experience that people have talked to so if you disagree with me
That's totally fine but I say as a beginner you want to avoid penny stocks or any stock with a market cap
Which is basically market capitalization that's basically the market value of the stock it's very easy to find that number
Any stock with a market cap under 2 billion $ any biotech or pharmaceutical company any mining or exploration company
As well as any company that is not turning a profit one of the easiest ways to see if a company is turning
A profit and one of the easiest ways to see if a company is turning a profit is to look at the PE or the price to
Earnings ratio, if it is negative or it says like n/a or it's not there it's because they're not turning a profit you want
To find a stock with a positive PE ratio but if you want to learn more about PE ratio I have a whole video talking
About that, I'll probably link that up so you guys can get an idea what I'm talking about with that ok so the first
Stock on my list here is waste management they trade on the new york stock exchange under the symbol WM
They have a market cap of 31.7 billion they currently pay a 2.36% dividend and their price to earnings ratio is 27.19
So everyday essentials and utilities are typically great investments and waste management is a trash and
Refuse company they are the largest in us they have a network of landfills, disposals and recycling centers
Now I think we can all agree that waste collection is essential to our everyday lives I'm sure that if you guys
Ever missed the trash can, you forgot to put it out and you had to double up one week you realize how much
Trash you really produce when you have all those bags in there so imagine if that just went away so obviously this
Is not a business that is disappearing anytime soon and it is not really a business that changes
Other than they might be adapting and improving their fleet but as far a we use it we just bag our trash up and
Throw it in the bins put our recycling is there there's not much that's gonna change with that and i don't see us
Producing any less waste in the future especially because there is more people moving into this area
And just more people, in general, there's gonna be more trash so it's a business that is not changing
It's very stable waste management has a very low risk of disruption and that's for two reasons number 1:
Very capital intensive fleet so it's incredibly expensive to get all of those trucks and buy those trucks in order to do
This business and number 2 is it's a heavily regulated industry because there isn't a lot of competition and
There is a lot of regulation involved with the waste removal business and waste management is heavily
Regulated in doing that now waste management as a regulated business simply passes along rising cost
To the customer so they can pretty much guarantee that they are always going to make a healthy profit
And they thave a huge competitive advantage due to this low risk disruption they also have had
Stable growth over time in the history of rising dividends now what's crazy to me and I know that this, it's just
Crazy to me that in the last 12 months this stock is actually up 26% and over the last 5 years this stock is up
A 100% it just blows my mind that you could have invested 5 years ago and something as simple as
A waste management service that's so essential to our lives, and doubled your money in 5 years so
That's really good track record for the stock and over the last 5 years that is an incredible return I'm sure that any
Of us would be happy with a 100% return over the last five years, ok so the second stock is Microsoft the
Number one that everyone has heard of they trade on the NASDAQ exchange under the symbol MSFT
Much larger market cap, they're at a 502.1B they pay a 2.39% dividend and their price to earnings ratio is at 30.73
Microsoft has been turning a profit and rewarding shareholders for decades they dominate the software
Industry with the windows operating system as well as the office suite
If you guys haven't heard of either of those two you've probably been living under a rock or never used a
Computer in your life they are pretty much essential to day to day operations in every single office in the world
For the most part except if you have been using the mac's or any other operating system but for the
Most part windows is very essential for our daily lives and then there was a lot of concern with this company
As far as how they are going to keep up in the future and the trends and everything moving towards the cloud storage
But they released office 365 as well as a couple of other cloud based software they have their CRM
Which is I think for businesses trying to track of leads they now have a cloud based CRM
But they also have office 365 and a couple of other cloud based programs they're other product lines
Include XBOX that's another big name as well as BING the search engine as well as the SURFACE they make
Tablets and just basically a handheld tablet with a keyboard that flips out kind of like the next
Generation of the laptop what they're trying to be they recently acquired Linkedin which is a very
Logical play for Microsoft and over the last 12 months the stock is up 16% and again over the last five years
They're up 102% so they're right there it's two stocks you could have invested five years ago and doubled you're money
So that's pretty cool
Ok so the third stock is American Express they trade on the NYSE under the symbol AXP they have a market cap of 67.37B
A 1.69% dividend yield so lower that the other ones that we have talked about but they're price to earnings ratio
Is currently at 13.44 which we are gonna talk about in a second that is actually incredibly low so in 2017 altho
This 1.69% dividend seems like a paltry amount in 2017 American Express will pay BH Close to 200M $
In dividends due to the size of their position in American Express now American Express provides charge and credit card payment products.
As well as travel related products to customers and businesses, to consumers and businesses world wide.
I think we can all agree.
The payment services provided by American Express are essential to our lives.
I personally do not have an American Express card, but know a lot of people who do.
And if you have an American Express card. Did you use it today?
Because, if so that just proves how essential these services are to us.
So this is a service again that isn't going to be going anywhere.
Now like I said their current price ot earnings ratio is low.
Now what that price to earnings ration basically means is that
$13.44 invested would yield you $1 in company earnings.
Basically a comparison of the price of the stock or share price.
Compared to the earnings that that stock gets.
So basically if you invest $13.44 you should get about $1 worth of company earnings.
However when we look at Visa theirs is 42, MasterCard is at 30 and PayPal is at 37.
So when a stock has a low price to earning ratio compared to the P/E ratio of stocks of the same sector or industry.
That's a good way to decide if that stock is a value or if it is over priced, so based on comparing it to their main competitors it appears to be a good value right now.
With a price to earnings ratio of less than half of any of their competitors right now
Over the last 12 months they are up 21%.
And over the last 5 yrs they are up 32%.
So not as much as the other ones we talked about before.
But still over the last 12 months that's a pretty nice return right there.
No.4 This is one that you have probably heard of but not really thought of, that's Cisco Systems they trade on the NASDAQ Exchange.
Under the symbol CSCO.
They have a market cap of $162.08B
They currently pay a 3.56% dividend, which is a fabulous dividend compared to these other ones here.
Um, any time you see a dividend in the 4-6% range that is a very good dividend for a stock to be paying.
And they currently have a price to earnings ratio of 16.76
I can't speak, um I can't speak to wether if that is low or not because I have to compare it to
Other companies in that industry and I didn't really do that, you could do some research your self.
And I'm not really sure of who the main competitors of Cisco are.
But, if you guys wanted to look into that just compare to their competitors see if that is a high P/E ratio, if it makes sense.
Or if it is a low P/E ratio.
But Cisco is the networking giant that is responsible for the equipment that facilitates our financial transactions
And file sharing over the internet.
The high dividend yield makes them an attractive investment.
And they have paid their first dividend in 2011, and has been increasing dividends since then.
So they do not have as great of a history as some of these other stocks, but they have a nice hefty dividend at 3.56%.
Now what is interesting is that analyst expect Cisco to grow earnings by 11% per year.
And the next, "O" 11% over the next five years.
And the dividend should follow earnings since their a representation of the company's earnings paying you back for investing in them.
And over the last 12 months that stock is up 16%.
Not as much as the other ones here, but over the last 5 years they are up 64%, so that would not have been a bad investment 5 years ago.
An then the final stock again, this is one that everyone has heard of an I have talked about it numerous times on this channel.
That is Apple stock traded on the NASDAQ Exchange.
Under the symbol AAPL they have a market cap of an astonding $737.62 B.
Currently paying a dividend of 1.61% and their price to earnings ratio is 16.92.
Apple has been a great long term investment for many and they need no introduction I don't have to sit here and explain to you what Apple does for us.
The majority of us are probably viewing this video on an Apple device right now, or there is one in your pocket if you are on the computer.
Or maybe it is sitting on your desk, but they are an essential part of our lives.
Apple products have undoubtedly become an essential part of our every day lives.
Where would many of us be without our Iphones right now we would absolutely stranded.
They have been one of the hottest stocks of 2017 after they posted record high earnings.
And they are the most valuable public company in the world based on market cap.
So over the past 12 months they are up an astounding 32%, an over the last 5 years up 72%.
But, anyways guys those are 5 stocks I might recommend to beginners.
Um, if you guys enjoyed this video or have any feed back please drop me a comment below.
And if you guys are wanting to learn more about trading the stock market I do have my beginners guide to stock market trading.
Which I will link in the description and there should be something popping up on the screen here as well.
But if you guys liked the video please drop a like, if you are new to the channel please consider subscribing to the channel to be notified of any future uploads.
And as always thank you guys for watching this video.
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