$1,000 into DRIP for child - which company?

Altria (MO)

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I let mine pick..

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Disney is a good stock but for a DRIP, its dividend is pretty low.

With $1,000 he could only buy 11 shares which means it would take almost 10 years before he would have accumulated enough dividends to buy one full share.

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Disney is a good stock but for a DRIP, its dividend is pretty low. With $1,000 he could only buy 11 shares which means it would take almost 10 years before he would have accumulated enough dividends to buy one full share.

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That's what I need to look into, is how long before I'd be getting an extra share each quarter on dividend reinvestment. The GE stock initially peaked my interest. $1,000 could get 37 shares right now. The dividend is about 3%.

That AT&T stock looks legit for this though. Could buy 28 shares today, and with a 5% yield I'd be getting about 1 share per year for now.

given that you're lookin 20-25 years, of those I'd choose KO (followed by JNJ and PG).

CL is too overpriced for consideration. Tech is totally unpredictable for your time horizon. I love XOM and CVX, but not as first choices (again, for your specified purposes). GE cut dividends as little as 6 years ago

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Why not diversify a little bit and buy a mutual fund or ETF?

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I thought about that as well. I personally don't know enough about the pros/cons of doing the direct stock purchase with dividend reinvestment vs. a dividend/index ETF. Both seem to have very low fees, if any.

Large cap stocks that have a track record of increasing dividends each year over the last 15-20 years just sound very promising to me, and with dollar cost averaging the appreciation over the long term seems like it would pay off. If I'm off base here please let me know; a good etf such as VYM could provide the same results I'm looking for. Long-term dividend reinvestment is what sounded appealing to me when I started researching some of the best companies for it.

J&J, Procter and Gamble, Coke, or Walmart would be my choices.


Again though, a mutual fund is smarter

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but sometimes for kids the fact they can actually see they own stock in a company they know and like can keep them interested and learning.

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This is a very good point, and I think an important factor. If my parents would've told me as a little kid watching Jungle Book that I owned part of Baloo and Mowgli I would have been excited as hell, and it definitely would've peaked my interest in investing at a young age.

Telling your kid that you own a bunch of different companies that some guy in an office in New York manages just doesn't have the same ring to it.

That being said my parents did neither, and not only did I have to learn on my own, but my mom looks at me with wide eyes when I tell her I invest in stocks.

Yes, the idea of being able to tell my kids that they own Coke, McDonald's, Visa, etc. seems like it would mean more to them.

But in all honesty, for my purposes I'm looking for a consistent return on investment for them. Having direct purchase of stocks would just be a bonus to get them interested in it, which would help them out when they are getting ready to enter the workforce.

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KO is another stock in his portfolio

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To quote Warren Buffet:

"I plan to hold KO - well - forever."