17 Best Stocks for Kids According to Jim Cramer

2. PepsiCo, Inc. (NASDAQ:PEP)

Number of Hedge Fund Holders: 58

Another good choice for young kids is PepsiCo, Inc. (NASDAQ:PEP) because of its dividend history according to Cramer.

“We often hear the term dividend aristocrats, companies that have long histories, certainly more than 25 years of increasing dividends. Love them. It’s hard to go wrong with the big well-run consumer packaged good plays. Here I’m talking about a company like tried and true Procter & Gamble, PepsiCo.”

PepsiCo (NASDAQ:PEP) specializes in the production, marketing, and distribution of various beverages and snacks, featuring well-known brands such as Lay’s, Gatorade, Pepsi, Doritos, Tropicana, and Aquafina. While Cramer picked the company as a kid-friendly investment, he did outline a few challenges PEP is facing a few days ago as he commented:

“The other day, PepsiCo got crushed on weaker than expected earnings… So take PepsiCo, I don’t know if people realize how excellent this company really is. The stock always carried a premium price to earnings multiple, meaning we’re willing to pay extra for its profits. They have terrific brands at Pepsi, Mountain Dew… FritoLay, the latter being one of the most dependable of all staples.

But now PepsiCo’s got a problem because FritoLay is not delivering the consistent numbers that it used to. Why? Management says it’s because younger generations fixate on health and there’s nothing particularly healthy about potato chips or Cheetos. They’ll buy smaller portions. That’s what their hope is. Me? Look, I’m sure that a part, that’s a part of it, but I do think that PepsiCo’s in somewhat of denial about the impact of GLP-1 weight loss drugs from Novo Nordisk, which reported a terrific quarter this morning, and Eli Lilly, which reports tomorrow.”