In this article, we will be taking a look at the 12 Best Stocks to Own for Grandchildren.
Teaching kids about stock market trading can give them a big edge in a time when financial literacy is becoming more and more acknowledged as an essential life skill. Research indicates that early financial education promotes better money management, the development of long-term wealth, and increased financial security as an adult. Children who are exposed to investing at an early age might acquire traits that will influence their financial destiny, such as patience, risk assessment, and the power of compounding. According to a 2023 National Financial Educators Council (NFEC) research, the average American loses $1,819 a year as a result of their lack of financial literacy.
Early investment education can help close this gap and provide kids with the tools they need to deal with difficult financial situations. Children who are exposed to stocks are better able to comprehend ideas such as market swings, diversification, and risk and reward. Gaining knowledge about how businesses function and increase their earnings also contributes to a better comprehension of the economy. Common financial blunders like emotional investment, excessive debt, and inadequate money management can be avoided with this knowledge.
The power of compound interest is among the strongest arguments for teaching kids about investing. Simply by starting early, a child who starts saving at age 10 rather than waiting until age 30 could accumulate a lot more wealth by retirement. Educating kids about stocks promotes financial decision-making discipline and critical thinking. They learn the importance of investing for the future rather than viewing money as something to be spent carelessly. According to a Fidelity Investments study, 82% of parents who teach their kids about money think it makes them more financially independent.
Teaching investment ideas through real-world examples, like keeping an eye on a stock portfolio, also encourages participation and hands-on learning. Future generations will require financial literacy to manage a changing economy as a result of developments in artificial intelligence, automation, and digital finance. According to experts, kids who comprehend investing will be more equipped for business, homeownership, and retirement.
With this in mind, let’s dive in and look at the best stocks to own for grandchildren.
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Our Methodology
For our methodology, we first used the Stock Analysis screener to filter stocks based on two criteria: dividend growth above 10% and total returns exceeding 500% over the past five years. From the resulting list, we selected the top 12 stocks. The final ranking was determined by the total number of hedge fund holdings as of Q2 2025, according to data from the Insider Monkey database.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Here is our list of the 12 best stocks to own for grandchildren.
12. Tecnoglass Inc. (NYSE:TGLS)
Number of Hedge Fund Holders: 21
Tecnoglass Inc. (NYSE:TGLS), a leading manufacturer of high-end aluminum and vinyl windows and architectural glass, continues to demonstrate strong financial performance and investor confidence as of September 2025. The company recently dismissed allegations by a short seller, calling the claims false and misleading, and reaffirmed its raised full-year 2025 financial guidance, signaling robust profitability and cash generation. Management also emphasized an active share repurchase program, reflecting confidence in the company’s undervalued fundamentals and growth potential. TGLS stands twelfth on our list among the best stocks to buy.
In September 2025, Tecnoglass Inc. (NYSE:TGLS) declared a quarterly dividend of $0.15 per share, or an annualized $0.60, payable on October 31 to shareholders of record as of September 30. This continued dividend policy underscores the business’s commitment to returning value to shareholders and sustaining long-term investor trust. TGLS also participated in the D.A. Davidson 24th Annual Diversified Industrials & Services Conference, highlighting ongoing engagement with investors and reinforcing its market presence.
Tecnoglass Inc. (NYSE:TGLS) serves multi-family, single-family, and commercial markets through a 5.8 million square-foot vertically integrated manufacturing complex in Barranquilla, Colombia. The corporation is the second-largest glass fabricator in the U.S. and the leading architectural glass transformation company in Latin America, generating 95% of revenue from the U.S. Its premium products are featured in high-profile projects like Salesforce Tower in San Francisco and One Thousand Museum in Miami.
11. Dillard’s, Inc. (NYSE:DDS)
Number of Hedge Fund Holders: 22
Dillard’s, Inc. (NYSE:DDS), a major U.S. retailer specializing in fashion, cosmetics, home furnishings, and accessories, reported steady Q2 2025 results, with net income of $72.8 million, or $4.66 per share, nearly matching last year’s performance. Total retail sales rose 1% to $1.447 billion, with comparable store sales also up 1%. Growth was strongest in juniors’, children’s apparel, and ladies’ accessories, while home and furniture sales remained weak. Gross margin slightly declined to 38.1% from 39.1%, and inventory management improved, increasing just 2% year-over-year. The company repurchased 24,500 shares for $9.8 million during the quarter, leaving $165.2 million in its ongoing buyback program.
Investor confidence has surged, with DDS’s stock reaching a 52-week high of $611.98 in September 2025, a year-to-date gain of 38%. The company maintains a quarterly dividend of $0.30 per share and ended the quarter with over $1 billion in cash, reducing long-term debt to $225.6 million, reflecting strong financial health.
Strategically, Dillard’s, Inc. (NYSE:DDS) focuses on store remodels, trend-driven merchandise, and expanding omni-channel capabilities. Partnerships, such as with Pandora Jewelry, have grown rapidly, now featuring 100 Pandora locations inside the corporation’s stores, enhancing product offerings and customer engagement.
10. Build-A-Bear Workshop, Inc. (NYSE:BBW)
Number of Hedge Fund Holders: 24
Build-A-Bear Workshop, Inc. (NYSE:BBW), a global retailer known for its interactive stuffed animal experiences, continues to demonstrate strong growth despite challenging retail conditions. In Q2 and the first half of fiscal 2025, the company reported revenues of $252.6 million, up 11.5% year-over-year, and pre-tax income of $34.9 million, a 31.5% increase. These results prompted an upward revision of its full-year pre-tax income guidance to $62–70 million, matching or slightly exceeding 2024 levels.
The company is expanding its footprint, reaching 627 stores in Q2 after adding 14 new locations, with a focus on international and partner-operated stores. This growth is complemented by digital initiatives and strategic partnerships that extend customer engagement beyond traditional malls, addressing traffic challenges in mature retail markets.
Amid macroeconomic pressures, including U.S. tariffs on goods from China and Vietnam, Build-A-Bear Workshop, Inc. (NYSE:BBW) has mitigated costs by sourcing materials directly and managing inventory proactively. Tariff impacts are expected to remain below $11 million in 2025, while the corporation limits price increases to maintain its value-driven, experience-focused offerings.
Build-A-Bear Workshop, Inc. (NYSE:BBW)’s experiential model, emphasis on customization, and planned-trip appeal continue to drive resilience in e-commerce and licensing channels, making it stand out among the best stocks to buy for investors seeking growth and stability. The firm also maintains shareholder value through ongoing share repurchases and a quarterly dividend of $0.22 per share, payable in October 2025.
9. IDT Corporation (NYSE:IDT)
Number of Hedge Fund Holders: 25
IDT Corporation (NYSE:IDT), a global provider of fintech and communications solutions, operates through key segments including National Retail Solutions (NRS), BOSS Money, and net2phone. The company continues to focus on expanding these platforms to drive steady growth in payments, cloud communications, and digital services.
In September 2025, IDT announced a quarterly cash dividend of $0.06 per share, payable on October 10, reflecting its commitment to returning value to shareholders and reinforcing confidence in its financial stability. The firm is also set to release its Q4 and full-year 2025 results on September 29, followed by a conference call to discuss strategic initiatives and operational performance.
Recent data from the NRS segment show a 3.5% year-over-year increase in same-store sales for June 2025, signaling continued traction in the retail and fintech space despite a slight slowdown from prior months. This performance highlights the effectiveness of IDT’s integrated solutions and its adaptability to evolving consumer trends.
Looking ahead, IDT Corporation (NYSE:IDT) anticipates reaching $1.3 billion in revenue and $104.9 million in earnings by 2028, driven by disciplined capital management and growth in core business segments. These developments position the business as a resilient player with potential long-term value for investors seeking stable, generational investment opportunities.
8. SM Energy Company (NYSE:SM)
Number of Hedge Fund Holders: 36
SM Energy Company (NYSE:SM), a Denver-based independent energy producer, is strengthening its position as a leading player in U.S. oil and gas through strong operational execution and disciplined financial management. With core operations in the Permian and Uinta Basins, the company continues to expand production while advancing its ESG commitments.
In September 2025, SM declared a quarterly cash dividend of $0.20 per share, payable on November 3, underscoring its commitment to shareholder returns. This follows a record-breaking Q2, where production hit 19.0 MMBoe (209.1 MBoe/d), led by exceptional performance in the Uinta Basin. Oil production surged 59% year-over-year and now represents 55% of the company’s total output.
Financial results further highlighted the SM Energy Company (NYSE:SM)’s momentum. SM Energy reported net income of $201.7 million, or $1.76 per share, alongside adjusted EBITDAX of $569.6 million. The firm paid down its revolving credit facility to zero, closing the quarter with $101.9 million in cash and targeting a leverage ratio of 1.0x by year-end. For 2025, management raised oil production guidance to 53–54% of total volumes and capital expenditures to $1.375 billion, reflecting confidence in sustaining growth, making the stock one of the best stocks to buy for investors focused on energy.
On the sustainability front, SM Energy Company (NYSE:SM) continues to make measurable progress. Updated disclosures in August reported a 74% reduction in flaring, a 61% improvement in methane intensity since 2019, and a 40% water recycling rate. These achievements showcase the company’s balance of growth with environmental responsibility.
7. Core Natural Resources, Inc. (NYSE:CNR)
Number of Hedge Fund Holders: 45
Core Natural Resources, Inc. (NYSE:CNR), formed in January 2025 through the merger of CONSOL Energy and Arch Resources, has quickly emerged as a leading U.S. coal producer. Headquartered in Canonsburg, Pennsylvania, the company operates primarily through its Pennsylvania Mining Complex (PAMC) and CONSOL Marine Terminal, supplying thermal and metallurgical coal to domestic and international markets.
In Q2 2025, the corporation reported a 47% year-over-year revenue increase, outperforming sector peers despite ongoing industry volatility. Profitability remains pressured by expansion costs, with a net margin of 0.63% and return on equity of 3.01%. Analysts forecast earnings per share of $11.40 for 2025, with expectations rising to $17.60 in 2026.
A major focus this month is the delayed restart of the Leer South mine, now expected to resume production in the fourth quarter. Once operational, the facility is projected to enhance production efficiency, boost free cash flow, and secure long-term supply contracts. The restart also supports CNR’s capital return strategy, which targets distributing up to 75% of free cash flow to shareholders.
Core Natural Resources, Inc. (NYSE:CNR) also continues to provide direct returns through dividends. Earlier this month, Core paid a $0.10 per share dividend, representing a yield of 0.48% with a payout ratio of 18.35%. Management has indicated plans for sustainable, gradually increasing shareholder distributions as Leer South comes online and free cash flow expands.
6. Targa Resources Corp. (NYSE:TRGP)
Number of Hedge Fund Holders: 48
Targa Resources Corp. (NYSE:TRGP) is a leading midstream energy company with extensive infrastructure that connects North American natural gas and natural gas liquids (NGLs) to key domestic and international markets. Its core operations in gathering, processing, and transporting hydrocarbons provide fee-based revenue streams, offering resilience and stability for long-term investors.
In September 2025, the corporation launched the Forza Pipeline Project in the Delaware Basin, marking its most significant recent development. The 36-mile, 36-inch pipeline is designed to transport up to 750,000 dekatherms per day from Southeast New Mexico to markets near the Waha Hub in Texas. By linking new and existing gas processing facilities to high-demand markets, the project positions TRGP to benefit from rising demand for cleaner fuel infrastructure.
Wall Street has taken note of Targa Resources Corp. (NYSE:TRGP)’s growth potential. BMO Capital initiated a “Buy” rating this month, citing the company’s strong asset base and strategic presence in the Delaware and Midland basins, making it one of the best stocks to buy in the midstream energy sector. Despite headwinds in the Permian rig market, TRGP’s scale and efficiency are expected to drive production volumes ahead of peers.
About 90% of TRGP’s earnings come from multi-year, fee-based contracts, insulating it from commodity price volatility. Its controlling position in the Mont Belvieu fractionation hub, combined with strong insider ownership and improving EBIT margins, further strengthens its long-term outlook.
5. EMCOR Group, Inc. (NYSE:EME)
Number of Hedge Fund Holders: 51
EMCOR Group, Inc. (NYSE:EME), a Fortune 500 leader in mechanical and electrical construction, industrial and energy infrastructure, and building services, has taken a major strategic step that sharpens its U.S. focus and strengthens its long-term growth trajectory.
In September 2025, the business announced an agreement to sell its U.K. building services unit, EMCOR UK, to OCS Group UK Limited for about £190 million ($255 million). Expected to close by year-end, the deal will boost EME’s operating margins and provide fresh capital to expand its U.S. operations, particularly in electrical and mechanical construction services. CEO Tony Guzzi noted that the move accelerates the business’s “local execution, national reach” strategy, positioning the company to capitalize on strong domestic infrastructure spending and pursue strategic acquisitions.
Financially, EMCOR Group, Inc. (NYSE:EME) continues to deliver strong results. The company has consistently beaten earnings and revenue expectations and recently raised its 2025 guidance to $24.50–$25.75 EPS with revenue projected at $16.4–$16.9 billion, both above analyst forecasts. Growth is being fueled by rising demand for data centers, mission-critical facilities, and other high-value infrastructure sectors poised for long-term expansion.
Analysts expect double-digit EPS growth in 2025, with additional momentum from the U.K. divestiture. By reallocating resources to higher-growth domestic markets, EMCOR Group, Inc. (NYSE:EME) is reinforcing its position as a top-tier infrastructure and services provider, making it an attractive long-term investment for those seeking durable returns.
4. Comfort Systems USA, Inc. (NYSE:FIX)
Number of Hedge Fund Holders: 53
Comfort Systems USA, Inc. (NYSE:FIX), a leading provider of mechanical and electrical contracting services across the U.S., continues to strengthen its position with strong financial results and strategic growth initiatives. The business specializes in HVAC, plumbing, electrical, piping, and related off-site construction and monitoring solutions, serving a broad range of commercial, institutional, and industrial clients.
On September 26, 2025, shares of Comfort Systems USA, Inc. (NYSE:FIX) rose 2.92% after the company announced a new strategic HVAC partnership aimed at boosting cost efficiency and securing better procurement channels. Despite a 37% dip in trading volume, the development reinforced investor confidence in its ability to protect margins amid rising commodity costs.
The corporation s consistently exceeded expectations this year. Its latest quarter guidance topped market forecasts, highlighting strong project execution during broader market volatility. Earlier in September, FIX reported second-quarter revenue up 20.1% year-over-year, while earnings per share surged over 70%. Growth was fueled by rising demand for data center infrastructure, reflecting its alignment with technology-driven construction trends and positioning it among the best stocks to buy in the industrial sector.
To support expansion, Comfort Systems USA, Inc. (NYSE:FIX) recently amended and expanded its credit facility to $1.1 billion, giving it greater financial flexibility to pursue larger, more complex projects. The firm also raised its quarterly dividend to $0.50 per share, or $2.00 annualized, signaling financial strength and a commitment to long-term shareholder returns.
3. Howmet Aerospace Inc. (NYSE:HWM)
Number of Hedge Fund Holders: 57
Howmet Aerospace Inc. (NYSE:HWM), a leading manufacturer of engineered metal products for aircraft engines, airframes, defense systems, and industrial markets, continues to benefit from strong demand across both commercial and defense aerospace sectors. Major clients include Boeing, Airbus, Lockheed Martin, and GE Aerospace.
In Q2 2025, commercial aerospace revenues rose 8% year-over-year, fueled by sustained air travel demand and increased production of more fuel-efficient aircraft. This segment, which makes up over half of HWM’s business, is also seeing growth from airlines extending the life of older fleets, boosting demand for aftermarket parts.
Defense aerospace posted even stronger results, with revenues up 21% in Q2, driven by engine spare orders for programs such as the F-35 and legacy fighters. With the U.S. government approving a $831.5 billion defense budget for 2026, HWM is well-positioned to secure additional contracts and expand its defense-related revenues, which currently represent 17% of total sales.
Howmet Aerospace Inc. (NYSE:HWM) has also been rewarding shareholders, raising its dividend twice in 2025, most recently by 20% to an annualized $0.48 per share, and repurchasing $300 million in stock during the first half of the year. Its buyback program has been expanded to $2.487 billion, reflecting confidence in long-term growth.
HWM’s stock has surged over 70% year-to-date, backed by strong earnings momentum and growing institutional investor interest.
2. Broadcom Inc. (NASDAQ:AVGO)
Number of Hedge Fund Holders: 156
Broadcom Inc. (NASDAQ:AVGO), a global leader in semiconductors and infrastructure software, delivered record results in its third quarter of fiscal 2025, underscoring its growing dominance in AI and networking technologies.
The corporation reported Q3 revenue of $15.95 billion, up 22% year-over-year, fueled by strong demand for custom AI accelerators, networking solutions, and VMware’s software portfolio. AI-related revenue alone surged 63% to $5.2 billion, marking the eleventh straight quarter of growth, with expectations to reach $6.2 billion in Q4. Non-GAAP net income hit $8.4 billion, while free cash flow rose 47% year-over-year to $7.0 billion. AVGO also returned $2.8 billion to shareholders through dividends, declaring a quarterly payout of $0.59 per share payable September 30.
Looking ahead, Broadcom Inc. (NASDAQ:AVGO) issued Q4 guidance of $17.4 billion in revenue, a 24% increase from last year, highlighting continued momentum. A cornerstone of this growth is the company’s expanding role in AI semiconductors. Its custom AI accelerators have become a major revenue driver, supported by a landmark $10 billion contract with a leading AI customer, reportedly OpenAI. This deal is expected to meaningfully boost earnings and cash flow starting in 2026.
1. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 235
NVIDIA Corporation (NASDAQ:NVDA) tops our list for being one of the best stocks to buy . It continues to dominate the AI and data center markets with groundbreaking developments in September 2025. The company posted second-quarter fiscal 2026 revenue of $46.7 billion, a 56% year-over-year increase, driven by strong demand for its Blackwell Data Center products, which grew 17% sequentially. CEO Jensen Huang described the Blackwell AI platform as a “generational leap” in infrastructure, with production scaling quickly to meet demand from advanced reasoning AI models.
A major highlight this month is NVDA’s strategic partnership with OpenAI, involving up to $100 billion in investment and a commitment to supply advanced data center chips for next-generation AI systems. This alliance strengthens the firm’s central role in the AI ecosystem and significantly expands its long-term market potential. In addition, the company announced a $5 billion investment in Intel stock, with plans to co-develop custom AI infrastructure for data centers and PCs, aiming at a $50 billion market opportunity.
NVIDIA Corporation (NASDAQ:NVDA) also introduced Rubin CPX, a new GPU designed to handle massive-context inference tasks, enabling million-token coding and generative video at unprecedented speed and efficiency. This innovation supports its vision of transforming data centers into fully integrated “AI factories.”
While we acknowledge the potential of NVDA to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than NVDA and that has 100x upside potential, check out our report about this cheapest AI stock.
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