10 Best Stocks For Beginners with Little Money

If you want to step into the stock market but don’t have enough knowledge or investment, then this guide is for you. Investing in stocks benefits you with long-term growth and high profit.

We helped beginner investors in the past who saw substantial growth and diverse portfolios within a year by following our advice. We picked the best stocks for beginners with little money, with detailed analysis.

Starting with a small investment is beneficial in many ways. It is less risky, you can invest regularly, you start getting high profits after some time, and you have long-term growth potential.

Let’s read all this in detail.

10 Best Stocks for Beginners with Little Money

Company	Ticker	Sector	Share Price	Market Cap
AT&T	NYSE: T	Telecommunications	14.96 USD	106.95 billion USD
Ford Motor	NYSE: F	Auto Manufacturing	12.20 USD	48.83 billion USD
Ally Financial	NYSE: ALLY	Finance	25.96 USD	7.83 billion USD
Teladoc Health	NYSE: TDOC	Health Care	19.47 USD	3.21 billion USD
Barrick Gold	NYSE: GOLD	Gold and Copper Production	14.96 USD	26.18 billion USD
Dropbox	NYSE: DBX	Technology	27.93 USD	9.71 billion USD
VF Corp	NYSE: VFC	Consumer Discretionary	16.00 USD	6.22 billion USD
Kinder Morgan	NYSE: KMI	Utilities	16.82 USD	37.48 billion USD
NiSource	NYSE: NI	Utilities	25.46 USD	10.52 billion USD
Kimco Realty	NYSE: KIM	Real Estate	17.04 USD	10.56 billion USD

1. AT&T (NYSE: T) – Telecommunications Powerhouse

Number of Hedge Fund Holders: 3
Market cap: 106.95 billion USD
Dividend yield: 7.42%
Share price: 14.96 USD

AT&T is the leading wireless carrier in the United States, ahead of Verizon and T-Mobile. It is the largest wireless carrier in the US and the third-largest telecommunications company globally based on revenue. These three companies dominate the market, and it’s tough for new players to enter due to the massive investment needed for telecom infrastructure. It generates a minimum of $16 billion in cash flow.

AT&T had to reduce its dividend after a merger, ending a long streak of increasing it annually. While more manageable, the new dividend is still quite high at 7%. So, while AT&T may not be as exciting as high-growth tech stocks, it offers stability and long-term income potential.

There was some concern when Amazon showed interest in the telecom sector, but AT&T is still growing, with more 5G and fiber subscribers and healthy revenues in Q1. The company still pays dividends even if the share price doesn’t rise significantly.

I recommend investing in this stock because of its stability and long-term earning potential. Even if the price of AT&T stock does not rise anytime soon, long-term investors will be rewarded for holding the stock. It is a generous dividend that currently yields around 7.5%. AT&T is sustainable because it eats up just 50% of free cash flow this year.

Pros:

• It is a stable and growing telecommunications business.
• It has long-term earning potential.
• It has plenty of free cash flow. ($16 billion this year)
• It has a high dividend yield. (Only yield about 8%.)

Cons:

• It made expensive mistakes that impacted investor confidence.
• It carries a significant amount of debt, creating financial challenges.
• Its performance erased 30 years of positive progress.

2. Ford Motor (NYSE: F) – Automotive Innovation Leader

Number of Hedge Fund Holders: 16

Market cap: 48.83 billion USD

Dividend yield: 4.92%

Share price: 12.20 USD

Ford Motor Company has headquarters in Dearborn, Michigan. It is a popular American car manufacturer established by Henry Ford in 1903. The company offers Ford and Lincoln branded vehicles, showcasing a rich history in the automobile industry.

In 2023, Ford made an impressive financial performance, with a notable revenue of 20% year over year for a total of $41.5 billion. This significant turnaround in earnings per share (EPS) from a loss to $0.44. Despite this, Ford’s stock experienced a roller coaster ride, rising by 31% in the early months and dropping 17% due to market uncertainty.

The declines are partly due to concerns about Ford’s ability to transition successfully into the new era of electric vehicles. However, if Ford manages this transition effectively, the current undervaluation of its stock could lead to substantial gains for investors who choose to invest now.

It’s important to keep an eye on developments, especially regarding potential strikes, as these could impact vehicle production, potentially leading to higher prices and lower inventory availability.

Pros:

• It offers a low price-earnings ratio, making it an attractive investment option.
• Its self-driving initiatives hold the potential for significant future growth.

Cons:

• Its heavy dependence on the North American market exposes it to economic downturns.
• It faces tough competition in the market, challenging its growth.
• It doesn’t have strong protection against competitors.

3. Ally Financial (NYSE: ALLY) – Innovative Financial Futures

Number of Hedge Fund Holders: 20

Market cap: 7.83 billion USD

Dividend yield: 4.62%

Share price: 25.96 USD

Ally Financial has headquarters in Detroit, Michigan. It is a prominent financial industry providing various services, including car finance, online banking, corporate funding, vehicle insurance, and mortgage loans. It stands out as one of the largest car finance companies in the U.S. It serves 4.5 million customers and originates 1.4 million car loans annually.

Investing in Ally Financial could be a wise choice due to its strong financial health and promising growth prospects. With a Growth Score of D and a Momentum Score of A, recent price changes and earnings estimates suggest it’s a favorable option for momentum investors. Analysts say Ally Financial’s 12-month average price target is $33.08, indicating a potential upside of 17.18%. Based on 5 buy ratings, 5 hold ratings, and 2 sell ratings, the consensus rating of Hold underlines its stability in the market.

Pros:

• Its stability and growth potential suggest it could outperform the market.
• It offers no transaction fees on mutual funds.
• It has a user-friendly website, and universal accounts provide a convenient, cost-effective solution for customers.
• It does not have physical branches, which reduces corporate expenses, leading to better customer rates.

Cons:

• Its net margin and forward EPS growth rate lag behind the financial sector.
• Rising short-term interest rates and potential declines in auto values challenge the company’s stability.
• It is a wise financial investment but has a low valuation due to risks like inflation, rising rates, and declining car values.

4. Teladoc Health (NYSE: TDOC) – Transforming Medical Access

Number of Hedge Fund Holders: 719

Market cap: 3.21 billion USD

Dividend yield: 0.00%

Share price: 19.47 USD

Teladoc Health is a leading telemedicine company based in the United States. It offers virtual healthcare services globally. Teladoc provides online medical care using videos and mobile apps, making healthcare accessible remotely. Established in 2002, it has grown into the largest telemedicine company in the U.S. Tedloc Health is operating in 130 countries and acquiring notable companies like Best Doctors and Advance Medical.

By trading on the NYSE, Teladoc serves 80 million people worldwide, with 56 million paid members in the U.S. According to a recent report, the company showed a 10% increase in sales, reflecting stable growth. I recommend investing in Teladoc Health due to its innovative status, strategic acquisitions, and use of data from Livongo, which aims to revolutionize virtual healthcare by providing comprehensive and personalized services.

Pros:

• It offers cost-effective ways to enhance long-term outcomes for patients.
• It has a lot of possibilities in the expanding telehealth market, indicating potential for future growth.
• It has a higher fair value than the current market price, attracting investor interest and increasing the stock price.

Cons:

• It faced a loss in goodwill due to past overpriced acquisitions.
• It is undervalued despite the possibility of growth.

5. Barrick Gold (NYSE: GOLD) – Pioneering in Precious Metals

Number of Hedge Fund Holders: 1049

Market cap: 26.32 billion USD

Dividend yield: 2.75%

Share price: 15.05 USD

Barrick Gold Corporation has headquarters in Toronto, Canada. It is a well-known mining company in 13 countries, producing gold and copper. In 2019, they generated 5.5 million ounces of gold and 432 million pounds of copper.

Barrick Gold has consistently met or exceeded market expectations despite market uncertainties for eleven consecutive quarters until Q3 2021. The company, considering a move to the New York Stock Exchange, aims to expand its investor base. Its adaptability, global presence, and effective cost management have enabled it to withstand market challenges. Barrick Gold stands out for investors considering the potential of the gold market.

It presents a strong opportunity with a growth score of D and a momentum score of B. I recommend Barrick Gold Corporation (GOLD) for those seeking to diversify their portfolio and tap into the stability of the gold market.

Pros:

• It shows promising technical prospects, indicating positive market performance.
• It benefits from favorable factors that increase the appeal of gold and increase price realizations.
• It receives a consensus buy rating, reflecting investor confidence and market optimism.
• It is well-diversified, providing a stable platform for long-term growth expectations.

Cons:

• Its underperformance is noticeable, even as gold prices have been on an upward trend.
• It is not participating in exchange offers, potentially missing out on opportunities.
• Its value is not very favorable from an investor’s perspective.
• Its portfolio of mines serves to diversify mine-specific and geopolitical risks.

6. Dropbox (NYSE: DBX ) – Cloud Storage Solutions

Number of Hedge Fund Holders: 51

Market cap: 9.77 billion USD

Dividend yield: 0.00%

Share price: 28.10 USD

Dropbox is based in San Francisco. It is a file hosting service providing cloud storage and synchronization. It was developed by MIT students (Drew Houston and Arash Ferdowsi) in 2007. it gained popularity for its seamless service across devices and operating systems.

Dropbox remains unstable because it faces criticism over security and privacy concerns. with a stock price below the industry average, making it an affordable choice for investors. Currently priced at $27.49, analysts suggest it has 14.14% upside potential, with an average target price of $30.43. Its intrinsic value is $43.15, indicating a buying opportunity. Its platform compatibility has broadened its user base, establishing it as a reliable cloud storage option. In my opinion, it has stability and growth potential; it’s beneficial for those seeking a dependable and versatile option in the tech market.

Pros:

• It offers a combination of consistent growth and an attractively low valuation.
• Favorable improvement in its relative strength (RS), indicating positive market performance.
• Based on the long-term strategy, the stock is affordable.

Cons:

• It faces strong competition from significantly larger companies in its industry.
• Relying solely on a brain-powered investment approach without generating profits is not sustainable.
• It is experiencing poor share price performance, indicating investor dissatisfaction and market challenges.

7. VF Corp (NYSE: VFC) – Leading in Fashion Industry

Number of Hedge Fund Holders: 9,084,817

Market cap: 6.27 billion USD

Dividend yield: 7.44%

Share price: 16.12 USD

VF Corporation is based in Denver, Colorado. It is a global apparel and footwear company founded in 1899. With 13 brands falling into the Outdoor, Active, and Work categories, VF Corporation boasts a significant presence in the U.S. backpack market, controlling 55% with brands like JanSport and Timberland.

It does not have a large-cap stock but has shown steady growth on the NYSE. Of 13 analysts, 15.38% recommend it as a strong buy, indicating confidence in its potential. The company’s positive outlook is influenced by the anticipated doubling of its earnings in the upcoming years. The company’s expected double earnings in the coming years contribute to its positive outlook. It is a promising investment option for you if you are seeking growth potential at an affordable price. VF Corporation is tracked by numerous analysts, making it likely that any significant news affecting the stock price has already been considered.

Pros:

• It has strong fundamentals as it offers a diverse range of products and holds a substantial market share.
• It provides a competitive advantage over single-brand competitors, ensuring a broader customer base.
• It offers potential profit opportunities that allow investors to sell high and repurchase when its price aligns with industry trends.

Cons:

• Its cash-to-debt ratio 0.1 ranks worse than 77.42% of companies, indicating poor financial strength.
• It faces challenges related to its inventory management.
• It has experienced a substantial decline of over 62% in the past year.

8. Kinder Morgan (NYSE: KMI) – Energy Infrastructure Leader

Number of Hedge Fund Holders: 500

Market cap: 37.31 billion USD

Dividend yield: 6.75%

Share price: 16.74 USD

Kinder Morgan, Inc. is the largest energy infrastructure company in North America. The company specializes in controlling oil and gas pipelines and terminals. Kinder Morgan operates approximately 83,000 miles of pipelines and 143 terminals. The company has approximately 72,000 miles of natural gas pipelines, consuming 40% of the natural gas.

In the past 30 days, KMI has seen upward earnings estimate revisions for 2023 and 2024. It currently carries a Zacks Rank #3 (Hold) and has gained 4.6% in the past six months compared with the 4.2% growth of the composite stocks belonging to the industry. Kinder Morgan Inc. stock has a Value Grade of C, a Growth Grade of B, and an Earnings Estimate Revisions Grade of C.

The 17 analysts offering 12-month price forecasts for Kinder Morgan Inc. have a median target of 20.00, with a high estimate of 23.00 and a low estimate of 18.00. The median estimate represents a 19.19% increase from the last price of 16.78. I recommend it because it can increase its value in the future, as stated above.

Pros:

• Over the last 3 months, KMI has been less volatile than 75% of US stocks, indicating a stable investment.
• Its business model is less affected by commodity price changes compared to other companies in the energy sector.
• It maintains substantial cash flow through fees collected for midstream asset utilization.

Cons:

• Its dividend has decreased by an average of 2.4% annually over the past decade, raising concerns for long-term investors.
• It does not provide a direct investment program, limiting convenient investment options for potential shareholders.

9. NiSource (NYSE: NI) – Powering Communities Safely

Number of Hedge Fund Holders: 8,980,929

Market cap: 10.55 billion USD

Dividend yield: 3.92%

Share price: 25.54 USD

NiSource Inc. is the largest utility company in the US. It serves approximately 3.5 million natural gas customers and 500,000 electric customers across six states through its local Columbia Gas and NIPSCO brands. The company has more than 8,000 employees. Ni Source has good value based on its Price-To-Earnings ratio (15.8x) compared to the peer average (34.1x).

NiSource Inc. stock has a Value Grade of C, a Grade of D, and a Grade of C. NiSource Inc. (NI) stock has fallen -7.61% over the last 12 months, and the average rating from Wall Street analysts is a Strong Buy. Investor’s proprietary ranking system gives NI stock a 29 out of 100. That rank is influenced by a short-term technical score of 17. Nisource Inc.’s analyst rating consensus is a “Strong Buy”. This is based on the ratings of 5 Wall Street analysts. In my opinion, it has a favorable growth score but also carries a top Zacks rank. According to studies, stocks with the best growth characteristics outperform the market consistently. And returns are even better for stocks with a growth score of A or B and a Zacks rank of #1 (Strong Buy) or 2 (Buy). NiSource’s earnings per share have increased at a rapid pace.

Pros:

• It has shown strong financial performance and remarkable growth in its earnings per share.
• It possesses solid growth characteristics, suggesting the potential for exceptional investment returns.
• It has received a Strong Buy consensus rating, signifying positive market sentiment and confidence in the stock.

Cons:

• Its cash-to-debt ratio of 0.01 ranks worse than 95.42% of companies in the utility industry, signaling weak financial strength.
• It is unstable because institutional investors are actively engaged in frequent trading.
• It involves commission fees, reducing potential returns for investors.

10. Kimco Realty (NYSE: KIM) – Shaping Retail Landscapes

Number of Hedge Fund Holders: 6,792,055

Market cap: 10.69 billion USD

Dividend yield: 5.34%

Share price: 17.24 USD

Kimco Realty Corporation is a shopping center-focused real estate investment trust. The company owned interests in 537 shopping centers and mixed-use assets in the United States as of March 31, 2022, totaling 93 million square feet of gross leasable space. For more than 60 years, the company has specialized in shopping center ownership, management, acquisitions, and value-added redevelopment activities. Kimco Realty was the first publicly traded vertically integrated REIT designed to be managed and advised internally, with its own property and asset management.

Kimco Realty is well-positioned to benefit from its portfolio of premium properties in the top major metro, sunbelt, and coastal markets amid healthy retail demand.

According to analysts, a rating of 52 puts Kimco Realty near the top of the real estate sector. Kimco Realty’s score of 52 means that it ranks higher than 52% of stocks in the sector. In addition, its overall score of 44 ranks it higher than 44% of all stocks.

It pays shareholders an annual dividend of $3.03 per share, indicating a yield of 5.39%. Part of the S&P 500 Index ($SPX), Realty Income stock has returned more than 131% to shareholders in the last decade after adjusting for dividends. I recommend it because it is a leading dividend payer. It pays a dividend yield of 5.50%, putting its dividend yield in the top 25% of dividend-paying stocks.

Pros:

• It owns premium properties in major metro Sunbelt and coastal markets, capitalizing on robust retail demand.
• It demonstrates low volatility, outperforming 75% of US stocks in the past 3 months, offering stability.
• It is strategically positioned to benefit from its collection of high-quality retail properties in key metropolitan markets, ensuring potential growth.

Cons:

• Economic shifts and market conditions influence its value.
• It has a high impact on rising interest rates.
• Its performance relies on the financial stability of its holders; economic downturns can affect the company’s revenue and profitability.

 

How to Choose Good Stocks For Beginners?

Choosing a good Stock requires detailed research and knowledge. Before investing, check the following factors, if you fulfill all these, then you can choose the good stock for you:

Historical Performance of Stock:

You should understand how a stock behaved in the past during various market conditions can offer insights, even though it doesn’t predict the future.

Market Conditions:

It’s important for you to consider the current state of the market.

Review Fundamentals:

You should do an analysis of the company’s financial health and performance.

Growth Potential:

You should assess whether a stock has the potential to grow based on trends or other factors.

Clear Investing Goals:

You should set clear and specific investment goals to align with your preferences.

Understanding how to analyze a company’s financial position is critical for investors when determining the value of the stock. Read our article “How to Analyze a Company’s Financial Position” to help you make a better decision. 

Best Stock Sectors for Beginners with Limited Capital

Beginners should focus on renowned sectors with strong financials and straightforward business models. Invest in sectors with long-term stability and reliability for a secure investment. You can invest in the following sectors:

Consumer Staples

Companies in consumer staples offer stable earnings, reliable dividends, and predictable cash flows. They’re known for consistent dividend payments, making them a safe choice for long-term investors. Many are part of the Dividend Aristocrats, raising dividends annually for 25+ years.

Healthcare

From 2010 to 2022, the healthcare sector had a 13.4% average return on investment. This sector includes medical services, devices, medications, insurance, and healthcare delivery.

Utilities

Utilities, like electricity and water providers, are essential, making their stocks less affected by economic downturns. Some utilities pay dividends, giving investors extra income. They are often regulated, making them stable investments compared to other sectors.

Technology

Technology companies are known for innovation and invention. Investors expect them to spend on research and development, leading to new products and steady growth. Innovations in products and services drive these companies forward.

 

Tips for Ongoing Stock Management and Research

Becoming a profitable stock trader requires planning and minimizing losses. Common advice like “plan your trade; trade your plan” might seem vague to beginners. Here are some rules that, when followed together, improve your chances of success in the markets.

• Have a trading plan in place.
• Approach trading seriously, like a business.
• Utilize technology to enhance your trading strategies.
• Safeguard your trading funds wisely.
• Continuously learn about the markets.
• Do not take any chances you can not afford to lose.
• Base your methods on factual data and analysis.
• Always set a stop loss to limit losses.
• Recognize when to stop trading to prevent further losses.
• Keep your trading activities in perspective, balancing risks and rewards.

 

Mistakes Beginners Should Avoid When Investing 

Some common mistakes made by beginner stock traders include:

Not Researching

Always research before investing in any stock because if you fail to research before, it’s an error.

Investing in Small Caps

Investing in small caps as a beginner can be more volatile and risky.

Not Diversifying

Diversifying your investments is important to reduce risk.

Getting Emotional

Emotional attachment to stocks can lead to poor decisions and holding onto losing assets.

Lack of Patience

A patient and gradual approach often leads to better long-term returns.

 

Is a Financial Advisor Necessary for Beginner Investors?

Of course, it is the most important step to have an advisor who knows, has a diverse portfolio, and has experience. Learning from a financial advisor reduces risks and gives you earning potential. You can use our website as we share detailed information about stocks and trading. You will learn comprehensive trading strategies and much more.

Read Investor Psychology: Are You The Victim of These Investment Psychological Traps? to learn more about investment psychological traps. 

Conclusion- Best Stocks For Beginners with Little Money

If you are a beginner with a small investment and looking for the best stocks to invest in, then ongoing education in the stock market is important. Once you start learning, things will become easy, and you will gain confidence with time. Always start with a small investment and focus on learning. Don’t hesitate to seek expert advice, as they will provide valuable insights. These valuable insights help you lower risks and avoid big mistakes. Combining continuous learning, patience, and expert advice allows you to analyze the stock market wisely and make informed investment decisions, even with limited funds.