Dividend stocks can be held in really any type of brokerage account - i.e. IRA, taxable, 401(k), etc... My preferred method of owning these types of stocks is through a low-cost ETF such as the Vanguard Dividend Appreciation ETF (VIG) or Vanguard High Dividend Yield ETF (VYM). Both funds offer a diverse basket of securities with full transparency and liquidity.
From a tax efficiency standpoint, the best place for high yield securities is in a non taxable or tax deferred account such as an IRA, Roth IRA or self employed retirement account. Depending on the parents tax situation, they could also be held in a Uniform Gift to Minors account. Warning: assets in an UTGM account become the child's when they reach majority age.
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