3 ASX stocks to solidify your children’s future

One of the greatest gifts a parent can give their children is a small investment in high quality companies. Okay, so they might not be able to play with it for a while, but by the time they come of age, that small investment could turn into something very sizeable.

Consider the capital gains and dividends that could be paid along the way. Through the power of compounding, that small initial investment could enable them to put themselves through higher education, fund a new car or even set them up for a house deposit.

The problem is, it can be difficult to predict which companies are in the best position to deliver such strong returns. Some investors have suggested that Medibank Private shares could be the way to go, but given the price they are likely going to open at, I tend to disagree (you can read more on that here and here).

Instead, here are three companies I believe could provide some security for your children’s future…

  1. Coca-Cola Amatil Ltd (ASX: CCL) could be a big winner over time. Following years of declining profits, the beverage manufacturer’s management team finally looks to have turned the ship around, providing an upbeat outlook beyond this financial year. While there are still risks, this could be the start of a big turnaround for Coca-Cola Amatil, and shareholders can continue to enjoy solid dividend yields as it recovers.
  2. ResMed Inc. (CHESS) (ASX: RMD) boasts an incredible track record for revenue and earnings growth and finds itself at the forefront of a very powerful trend. ResMed develops and manufactures products for the treatment of various respiratory disorders, with a particular focus on sleep apnea. Awareness of this condition is growing, although an estimated 95% of sufferers are not yet receiving treatment, leaving an enormous untapped market opportunity for the company.
  3. Shine Corporate Ltd (ASX: SHJ) is a junior Australian law firm which specialises in personal injury cases. However, it is quickly increasing its reach by expanding geographically around Australia while also venturing into new practice areas which should provide a solid foundation of growth for years to come. Recent selling by the company’s two founders has not only seen the share price fall to an even more appealing level, but also improved the stock’s liquidity.

All of these companies are presenting as excellent buys today and, in my opinion, could deliver greater returns than the Medibank Private IPO overtime. But there’s one more company which could top them all…

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Motley Fool contributor Ryan Newman owns shares in Coca-Cola Amatil Ltd and Shine Corporate Ltd.

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