The market has recovered somewhat from its recent correction.
However, many promising dividend stocks remain well below their recent highs.
Three in particular look like excellent buy-the-dip additions for my daughter’s portfolio.
10 stocks we like better than Union Pacific ›
While I don’t expect my daughter to become a stock-picking fanatic like me, I’ve enjoyed building a portfolio with her that is full of simple(ish) businesses that any elementary-aged kid might appreciate. Typically, we try to prioritize buying a new stock each year and have developed a portfolio that consists primarily of the following holdings:
A mixture of products she likes, understandable businesses, and brands she sees everywhere, these stocks present an easy way for me to point out just how many companies we come across in our daily lives.
Now, with the market continuing to tiptoe around “correction” territory, it’s as good a time as any to add to a couple of these stocks (and my daughter’s longest-held position) while they’re down between 19% and 48%. Here’s what makes these dividend stocks magnificent buys for any kid’s portfolio.
Image source: Getty Images.
While railroads are complex operators thanks to their labyrinthine nature, I’d argue they’re also excellent investments for kids. First, they’re easy to spot “in the wild,” making them an easy on-ramp to talking about stocks or investing.
Furthermore, their business models are simple to grasp. Someone in this city wants stuff from that town over there, and they will move it there for the right price.
As for why we chose Union Pacific, it is the leading railroad operator around our neck of the woods, and it is very common to see. Equally important, however, is that Union Pacific’s return on invested capital (ROIC) remains best in class versus its peers.
UNP Return on Invested Capital data by YCharts.
This metric tells me that Union Pacific is the best at generating returns from the capital it deploys on new projects. Whether it builds siding extensions to accommodate longer trains, adds new…
..
