Decorative china may shatter, expensive crockery can crack, and timepieces can break down, but stocks can really be the gift that keeps on giving. So you may want to consider giving some equity shares as a present, especially for family members graduating from college or to newlyweds to celebrate their marriage. A healthy financial life will be instrumental to happiness in their next chapter, and the power of compounding and long-term growth will help contribute to that.
Whether these stocks are in a retirement portfolio or brokerage account, the following stocks demonstrate the potential for additional growth, pay healthy dividends or have strong balance sheets.
60 Second Tips on TheStreet:
AT&T (T - Get Report) is a cheap stock that is trading at 17 times its current earnings and pays a nice 5.4% dividend, said Ron McCoy, a portfolio manager of the LOWS Strategy with Covestor, the online investing company, and founder of Freedom Capital Advisors in Winter Garden, Fla.
"The stock has pulled back recently from a high of $43, so buying here and there and reinvesting the dividends makes a lot of sense for long term investors," he said.
This stock could emerge as recession-proof since giving up the use of a smartphone is likely "one of the last luxuries to go" during rough times, McCoy said."Since Millennials are on their phone most of the time, they might as well get a rebate by getting some shares of AT&T," he said. "Getting a graduate to set up on a dividend reinvestment plan and automatically buying more stock every month can add up over time. This also teaches them the power of saving and investing their money. That would be the best gift of all."
GW Pharmaceuticals (GWPH) , a U.K.-based biotech company with a cannabis-based epilepsy drug, is a high-growth opportunity focused on the biotech side of the legal cannabis industry, said Michael Berger, founder of Technical420, a Miami-based company that conducts research on cannabis stocks.
"GW has a strong balance sheet and has one of the most attractive pipelines of cannabis-based treatments in advanced stages of FDA testing," he said. "The average Wall Street price target implies more than 50% upside to current levels."
Canopy Growth Corp., a Canadian company, is the largest licensed medical cannabis producer in the world, said Berger. The company operates under Health Canada and is also selling into international markets such as Germany, Australia, and Chile.
"Canopy Growth continues to see significant top-line growth and is operating at a profit," he said.
Emblem Corp (EMC.V EMMBF) is both a cultivator growing cannabis under Health Canada rules and also a "biotech sleeper," said Jason Spatafora, co-founder of Marijuanastocks.com and a Miami-based trader and investor known as @WolfofWeedST on Twitter. The company's pharmaceutical division is lead by John Stewart, a former pharmaceutical executive who was CEO at Purdue Pharma.
"Raise your hands if you were investing in Anheuser-Busch after prohibition ended in 1934," he said. "Prohibition is set to end for cannabis in Canada come 2018. Another consideration is that the former CEO of Purdue Pharma (makers of OxyContin) left one of the biggest privately-held biotech firms in the world to become a founder of a cannabis start-up to focus on drug therapies."
Emblem has a large cash war chest to help fund the construction of two 100,000-square foot facilities with projected revenues of CAD 70 million annually, Spatafora said.
"The first facility will be completed in the first quarter of 2018 just as Prime Minister Justin Trudeau is set to make recreational cannabis legal in Canada, which will surely create massive supply and demand issues to the benefit of producers like Emblem," he added.
Tesla (TSLA - Get Report) is not overpriced and the stock is likely to keep rising because its founder, Elon Musk, continues to innovate no matter what vertical he is targeting, said Spatafora. Developing cars which do not rely on fossil fuels is a game changer and with other major car manufacturers such as Sweden's Volvo jumping into the fray, it demonstrates the potential for future demand.
"If I was buying a stock for a new graduate, Tesla is on my short list," he said. "Tesla and Musk have the first-mover advantage. Since it's a gift, there's no downside risk for the receiver of the stock, but an education in how to invest in the future."
Although the stock of Amazon (AMZN - Get Report) , the Seattle-based behemoth is expensive, the company's growth is expected to rise, said Spatafora. The company is likely to enter into more industries and offer even more products to consumers.
"Since it's my gift, there is no downside risk," he said. "Amazon is the cannibal of industries that fail to innovate and my bet would be that they will continue this model of 'kill or be killed.'"
"If I'm giving a simple gift, GE would be the one to pass on since its stable and also teaches the receiver about dividends," he said. "It's not a sexy gift or stock by any means, but one that can be passed on and provide a stable return with zero effort."
Netflix (NFLX - Get Report) , the Los Gatos, Calif.-based streaming company, continues to garner more customers as it expands globally and produces more of its own content, even being nominated for several Emmys. As more consumers adopt cord-cutting, Netflix's growth will expand.
"Netflix just had a blowout quarter and the stock soared more than 8% after reporting its earnings," said K.C. Ma, a CFA and director of the Roland George investments program at Stetson University in Deland, Fla. "Millennials practically invented the term social media. They avoid all conventional social contact and replace it with media interaction. They like to drive Tesla's Model S, look at their Instagram and chat with Snap through their smartphones and stay home and watch movies on Netflix."
Even with the recent tech pullback, Apple's (AAPL - Get Report) stock remains the best performing Dow stock, said Ma. Apple has returned 28.6% year to date, beating both the Dow Jones Industrial Average's (DJIA) 7.64% and NASDAQ's 18.06% by a wide margin.
"Apple's iPhone sales dictate its top-line growth," he said. "There is an intense anticipation on iPhone 8 and the ten-year anniversary iPhone which launches later this year. As the gains for smartphone sales slow, Apple's longer-term growth will depend on content and mobile service. The increase in high margin services revenue and favorable commodity costs beyond memory prices helped gross margins. Service revenue is expected to double in next four years."
It took Facebook (FB - Get Report) the last 12 years to "make sure you know what your friends' babies look like and what your high school friends think about politics," said Ma. On June 22, Facebook changed its the mission statement from "give people the power to share and make the world more open and connected," to "give people the power to build community and bring the world closer together."
Now is an appropriate time to re-examine a company's stock after the company changes its mission statement.
"For investors, FB couldn't be more of a textbook social media stock to analyze," he said. "If steady monthly active user growth, double-digit annual revenue growth rates, positive earnings and positive free cash flow aren't good enough, the company routinely beat the toughest Street critics' estimates."