10 Stocks Every Beginning Investor Must Own

It's hard enough for seasoned stock pickers to choose which stocks to buy; for beginning investors it can be a downright daunting task.

As much as investing isn't rocket science, with thousands of stocks to choose from, someone just starting out can easily be overwhelmed. That's why this list will generally follow the advice of investing legend Peter Lynch to buy what you know, and include businesses that are easy to understand and have solid fundamentals, along with prospects for future growth. Here are 10 companies that every beginning investor must own.

5 Winning Stocks Under $49
We hear it over and over from investors, “I wish I had bought Amazon or Netflix when they were first recommended by the Motley Fool. I’d be sitting on a gold mine!” And it’s true. And while Amazon and Netflix have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Simply click here to learn how to get your copy of “5 Growth Stocks Under $49” for FREE for a limited time only.

Activision Blizzard (Nasdaq: ATVI) was one of those video gaming stocks perfectly positioned to capitalize on the lockdowns arising out of the coronavirus pandemic. With its portfolio of leading titles such as Call of Duty (one of the best-selling titles of the past decade) and World of Warcraft, gamers naturally gravitated to its products. Revenue jumped 14% last quarter as adjusted profits widened by 27%. And now with new gaming consoles ready to hit the market in November, a new round of video game buying is on the horizon.

Activision is also ready to capitalize on the rise of esports, the fastest-growing segment of the video game market. Though it's an opportunity still in the early innings, it could prove a lucrative business for Activision and its investors.

ALSO READ: 5 Top Stocks for November

Even though Alphabet (Nasdaq: GOOG) (Nasdaq: GOOGL) is being investigated for antitrust violations here and abroad, it doesn't mean the owner of Google and YouTube isn't worth investing in.

Its advertising business, which generates most of its revenue, remains strong even though it was hampered by the budget cuts that also hurt Disney. YouTube also remains popular and is really the only place to go for the kind of content produced on the platform, though Alphabet is looking to make inroads into the sort of short-form video that's made TikTok a hit.

Alphabet also has substantial hardware sales from Android, smart speakers, Google Assistant, Chrome, and Nest, and it's investigating tomorrow's technologies, such as driverless cars through Waymo. The ubiquity of Alphabet's technology, which is often the leading or only option available, makes it a must-buy stock today, even when such dominance invites regulatory scrutiny.

Unlike Apple, Amazon.com (Nasdaq: AMZN) has not split its stock in many years. And even with a price at over $3,200 a share, there's good reason to believe the company won't split its stock. But its high price doesn't necessarily mean a newbie investor shouldn't buy it. Buying an "expensive" stock with good-to-great growth prospects is far better than buying a cheap stock that isn't going anywhere. And with brokerage services like Robinhood and Webull allowing investors to buy fractions of a stock, you can still invest in one of the best growth stories around even if you don't have a few thousand to spare.

Amazon has come far from its humble beginnings as an online bookseller. Now it not only offers just about anything a consumer could want from its e-commerce site but also its Amazon Web Services cloud computing operations are arguably its most important business today.

There are few companies with as high of a profile as Apple (Nasdaq: AAPL), as many people likely own at least one of their products. What was once just a "computer stock" has become one of the most important consumer products companies on the market today, and the launch of the iPhone 12 will drive Apple's next leg higher.

Apple just split its stock 4-for-1 to make it more accessible to average investors and allow them to benefit from the growth it sees coming in the future. And though most people don't buy Apple shares for its dividend, the company does pay one that yields just under 1% annually as another way to return value to investors.

Bleach maker Clorox (NYSE: CLX) also found itself in the middle of a demand maelstrom brought on by the COVID-19 outbreak, as people sought to disinfect any surface they came into contact with. Clorox says even though it has several contract manufacturers working with it to produce its disinfecting wipes, it won't be able to catch up until next year.

Yet it's likely the shopping and cleaning habits that consumers began during the pandemic will outlive the crisis, keeping Clorox growing for years to come. But the consumer products company is more than just bleach and wipes, and it has a bevy of top-selling products including Pine-Sol, Formula 409, and Burt's Bees. Some 80% of its sales come from its market-leading products, making this a stock investors can still clean up with.

5 Winning Stocks Under $49
We hear it over and over from investors, “I wish I had bought Amazon or Netflix when they were first recommended by the Motley Fool. I’d be sitting on a gold mine!” And it’s true. And while Amazon and Netflix have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Simply click here to learn how to get your copy of “5 Growth Stocks Under $49” for FREE for a limited time only.

Disney (NYSE: DIS) is an entertainment powerhouse that was ravaged by the pandemic taking down virtually every segment of its business. The theme parks were closed, movie theaters and film studios were shut, and advertising budgets for its broadcast and cable TV shows were slashed. Because they are all intertwined -- a Disney movie generates TV shows and theme park rides -- the impact was harder than it otherwise would have been, but it also has the financial resources to weather the storm.

The bright spot has been its Disney+ streaming video service, which was a smash hit out of the gate, and much of Disney's focus going forward will be on that aspect of its business. Disney owns virtually all of the highest-grossing movie franchises such as the Marvel superhero movies, the Star Wars universe, Pixar, and of course its own vast library that can support Disney+.

This pandemic will pass, and Disney will be the entertainment titan it was once again.

ALSO READ: 13 Reasons to Buy Disney and Never Sell

The stock market went into a tizzy over the latest earnings report from Netflix (Nasdaq: NFLX), which seemed to indicate membership growth was slowing after it added only 2.2 million new subscribers in the third quarter. It had certainly been pushed along by the pandemic as people stayed at home and watched movies, adding some 26 million subscribers in the first half of the year, and the movie streaming service also isn't losing any members with retention trends even better than last year.

That means despite the onslaught of competition of new streaming services launching in 2020, Netflix remains one of the premier services to have. Analysts have suggested consumers will keep only two or three streaming services, and Netflix is one that will be among them for years to come.

Nike (NYSE: NKE) is one of the most recognized brands in the world with its iconic "swoosh" logo. Yet there are few companies with their fingers better placed on the pulse of their customers than the footwear maker. NPD Group says it has nine of the top 10 selling sneakers on the market.

Although Nike's business was disrupted by the pandemic as its retail outlets were forced to close, it has been making up lost ground with its e-commerce operations, so that revenue last quarter was down only 1%. A $1,000 investment in Nike's stock a decade ago would be worth over $6,300 today, and there is a great likelihood it will continue growing tomorrow, making millionaires out of savvy investors.

Procter & Gamble (NYSE: PG) is a consumer products behemoth with a powerful portfolio of brands including Braun, Crest, Febreze, Oral-B, Tide, and Pampers. Like Clorox, its brands are among the top-selling ones in their respective categories in countries around the world.

Procter & Gamble's success is built on making products that consumers need to buy again and again, which is why, even during the COVID-19 outbreak, it saw sales rise and was able to increase its dividend payment even as others were slashing them or suspending them. It made its first payout to shareholders in the late 1880s and has raised it annually for more than 60 years, making it a must-have stock.

ALSO READ: 3 Dividend Investing Tips That Could Earn You Thousands

As the maker of the premier electric car on the market, Tesla (Nasdaq: TSLA) is showing no signs of slowing down and could see deliveries of its vehicles surge 70% to 100% next year. Having turned profitable and now trouncing analyst earnings predictions, Tesla is also generating substantial free cash flow -- $1 billion worth last quarter alone -- and is ready to drive off in high gear.

The electric-vehicle maker just announced it was shipping 7,000 Model 3 cars from its Shanghai factory for delivery to Europe, a process that had been delayed by the pandemic. With an installed capacity for producing 250,000 units a year, there is plenty of open road for Tesla. At a price-to-earnings ratio north of 1,000, it sports some nosebleed valuations to be sure, but it also has enough growth prospects in front of it that a new investor should still feel comfortable behind the driver's seat of this stock.

5 Winning Stocks Under $49
We hear it over and over from investors, “I wish I had bought Amazon or Netflix when they were first recommended by the Motley Fool. I’d be sitting on a gold mine!” And it’s true. And while Amazon and Netflix have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Simply click here to learn how to get your copy of “5 Growth Stocks Under $49” for FREE for a limited time only.

New investors can often feel intimidated by the investment process as jargon intended to confuse people is slung around. Yet that doesn't have to deter a person from building up a portfolio of world-class companies with great business models and growth prospects.

The 10 stocks outlined here should serve all investors well, whether they are new or seasoned, and can form the foundation of a portfolio to carry them into the future.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Rich Duprey has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Activision Blizzard, Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Netflix, Nike, Tesla, and Walt Disney and recommends the following options: long January 2021 $60 calls on Walt Disney, short January 2022 $1940 calls on Amazon, long January 2022 $1920 calls on Amazon, long January 2022 $75 calls on Activision Blizzard, and short January 2022 $75 puts on Activision Blizzard. The Motley Fool has a disclosure policy.