When you think of the stock market, you might be inclined to think of the New York Stock exchange and wealthy traders and investors wearing expensive suits.
In reality, however, plenty of everyday Americans have a stock portfolio. They understand the financial value of stocks as a vehicle to build wealth, and, perhaps more importantly, save up for a happy retirement.
You might think that even this is the preserve of the middle class, who can afford to spend hundreds or even thousands of dollars building up their portfolios. Well, you’d be wrong on that front too.
Huge numbers of people in this country don’t have large amounts of capital to invest in the stock market, but that needn’t prove to be a barrier to entry, as there are plenty of stocks out there trading at under $20 per share.
Many of these will be trading at below $10 per share, with some even trading below $5.
It’s also worth noting that it’s not just people with limited access to capital who will be interested in cheaper stocks. First-timers, too, wary of making mistakes, may also prefer to begin their investment careers by picking relatively cheap stocks.
With that in mind, in this article we’ll be looking at some of the best stocks you can buy today for under $20.
Newmark Group (NASDAQ: NMRK)
Launched nearly a century ago in 1929, Newmark Group is a commercial real estate developer and management company based in New York. Newmark Group offers the full range of real estate services.
Buying, selling, leasing, upscaling, or downsizing, the company has experienced professionals to suit your needs.
Over the decades, they have slowly built up their business without much fanfare, weathering the economic tides that sweep across the Big Apple and the nation at large.
They’re one of those companies that, unless you’re from New York, you may well never heard of, despite the fact that they undoubtedly have some A-list clients and do business with some of the biggest names in the world.
For example, Newmark Group is rumored to be the company now ex-president Donald J. Trump turned to when he was looking to cash in on his Washington D.C hotel.
Whilst the company is based in the Big Apple, the company owns properties right across the United States, and also boasts an international presence.
A key part of any successful business is to have a range of different revenues, as a more diverse portfolio can help a business to weather tough economic conditions, whether just in one particular industry or economy-wide.
If one part of the business is struggling, another part can help to keep it afloat.
That’s why as an investor you’ll be pleased to know that Newmark group is not just involved in commercial real estate, but also has a robust portfolio of multi-family residential properties.
The company has an excellent pedigree, then, and they are also a great investment for an investor on a budget. The company had a great 2021, with its stock gaining a massive 71% between the end of February 2021 and February 2022.
The share price is down a little at the moment, at just $9.94 per share, but many market analysts are expecting Newmark stock to begin ticking back upwards in the near future, making it a great time to buy.
Combine that with a price-to-earnings ratio that is definitely on the low side at the moment, meaning the share price is likely undervalued (see also ‘How To Find Undervalued Stocks‘), and you have a very attractive stock for well under $20.
Everi Holdings (NYSE: EVRI)
Founded in 1998, Everi Holdings is a gaming and technology company headquartered in Spring Valley, Nevada. Their principal customers are casinos and the online gaming industry.
They have a global presence, serving customers right across Central and North America, as well as the United Kingdom, Europe, the Caribbean, and Asia.
The company has two main parts of its business, games and FinTech. In the games department, the company offers a wide range of gaming products, from classic mechanical reel games to video reel games and TourEvent, a slot tournament terminal and system machine.
Aside from physical gaming solutions, Everi also runs an online server for online gambling games.
Everi also provides financial access services, including a range of ATMs and cash kiosks, after a merger with Cashclub back in 2015.
Add in a recent lucrative deal with Exacta Systems to allow Everi to enter the horse racing market and you have a company that is aggressively expanding and diversifying its operations, which is always a good thing to look for an investment.
The company has also seen pretty consistent increases in revenue and net income in order to fund further tech development and innovation.
So, how are the fundamentals looking for Everi? Well, share prices are looking a little quiet at the moment at $18.10 per share at the time of writing. In fact, had this article been written at the start of the year, Everi would not have made this list.
The company has spent most of the year so far trading at above $20 per share, with a high of $23.92 in February. Share prices took a tumble at the beginning of April and seem to be on a slow path to recovery, so now seems like an excellent time to buy in.
Adding in a relatively low price-to-earnings ratio of 11.14 and an earnings per share ratio of 1.62, and Everi Holdings makes an excellent investment opportunity at under $20 per share.
Vodafone Group PLC (NASDAQ: VOD)
If you’re in the market for a tech stock under $20, then Vodafone stocks on the NASDAQ might be for you.
As I’m sure you’re already aware, Vodafone is one of the world’s biggest telecommunications companies with operations across Africa, Asia, and Europe.
In Europe, the company has overseen the roll-out of the continent’s most extensive 5G network, with the service provided in a dozen different countries.
The company has also dabbled in internet security and operates one of the largest digital television networks in Europe.
In Western Africa, Vodafone also provides wireless connectivity to more than 42m people through a fintech platform.
As we’ve said previously, a diverse portfolio is always one of the key things to look out for in terms of investing in a company, and Vodafone certainly ticks all those boxes.
The stock market analysts seem to agree that Vodafone is a good stock to be interested in. Many currently have the stock down as an ‘overweight’ stock.
Overweight is generally held to be somewhere between a ‘hold’ and a ‘buy’ rating, which means that they like the stock but don’t feel quite strongly enough about it enough to endorse it fully with a rating of ‘buy’.
Having said that, there are also plenty out there who would rate it an outright ‘buy’.
You can see why the experts seem to like Vodafone, with the fundamentals looking strong. Vodafone stock closed the most recent days trading at $15.97 per share.
The stock has a $23 price target (see also ‘What Is PT In Stocks?‘), but hasn’t quite managed to reach those heights in recent times, with a 52-week high of $19.05.
That said, the 52-week low share price is $14.42, so it looks as if the stock has more room for maneuver upwards than downwards.
The company’s price-to-earnings ratio stands at a respectable 20.71, although earnings per share are lagging a little at 0.77.
With the next earnings report expected in July, investors are excited at the prospect of better yields. The company’s dividend yield has gone up over the last year, and the forward dividend is 0.98 at a share yield of 6.24%.
All in all, it certainly doesn’t seem to be a bad time to buy Vodafone stock.
Petróleo Brasileiro (NYSE: PBR)
Petróleo Brasileiro, commonly referred to in the English-speaking world as Petrobras, is Brazil’s biggest oil company. Founded in 1953 and headquartered in Rio de Janeiro, the company is also one of the world’s biggest oil producers.
The company has a daily output of 2.84 million barrels of oil equivalent a day, translating into 1,828,000 barrels per day of oil products. The company also operates 13 refineries and 67 production platforms.
Petrobras is also an integrated oil company, meaning they have upstream, midstream, and downstream operations, as well as sizable global exposure.
Brazil as a nation has a large proven offshore reserve base, and Petrobras has both the cash and 50 years’ worth of experience to draw on in extracting it. In fact, the company is one of the world leaders in deep and ultra-deepwater exploration.
The result of Petrobras’ output is a net revenue of nearly $53.7 billion. You might wonder, then, why such a major player in the global oil industry- the company’s market cap is $92 billion- falls into the stocks under $20 bracket.
The answer is simple- it’s because the company is Brazilian, and even the biggest Brazilian stocks trade at relatively low prices , sometimes belying their market size.
The Brazilian economy is notoriously volatile, but there are several big commodities companies operating that have global significance.
We appreciate that some investors may have moral qualms about investing in a fossil fuels stock in light of the current climate crisis, but if you’re just looking for a stock under $20 you can’t go far wrong.
Petrobras stock gained 80% between the beginning of 2021 and the beginning of 2022, and current events in Ukraine have only served to bolster the stock.
The outlook for oil stocks continues to look good for the near future, so an increase in the share price over the coming months looks possible.
The analyst consensus is that the stock is overweight, and with a slight tumble in the share price in recent weeks, now looks like a great time to buy.
With an eye-watering dividend of 14%, a price-to-earnings ratio just above 3x, and expected earnings per share of $1 for the current quarter, this stock looks like a steal. The stock is currently trading for $13.51.
DraftKings (NASDAQ: DKNG)
If you’re a Robinhood investor that likes a gamble, then DraftKings could be the stock for you. We do really mean a gamble, too, as DraftKings is an American sports and fantasy sports betting company that was founded in Boston in 2012.
The company has only recently begun publicly trading, opening on the NASDAQ on April 24th, 2020. In order to do this, the company had to complete a reverse merger worth $3.3 billion.
So why DraftKings? Put simply, there’s a buzz in the air in the United States, and it’s all been brought about by the prospect of sports betting at last being legalized in many states.
It might not be happening quite as fast as investors would like, which will probably curtail share prices in the short term, but the prospect for a future explosion in share price is real.
The DraftKings Sportsbook launched in August 2018 in New Jersey, heralding the beginning of legal online sports betting in the United States.
Since that time, several other states have followed suit, including West Virginia, New York, Pennsylvania, Iowa, Indiana, and Illinois. Currently, mobile sports betting is legal in states that account for 36% of the population.
The company already has successful operations in ‘fantasy sports’ even in states where sports betting is illegal, as it is considered a game of skill, but the legalization of sports betting will provide huge opportunities for growth.
With a recognizable brand, DraftKings is well positioned to make the most of further changes to the legislation.
Where DraftKings has gotten approval to operate, it has been successful, with revenues growing from $192 million in 2017 to $1.3 billion in 2021.
The trouble for DraftKings is that it is having to burn through huge amounts of cash to try and gain some traction, spending $321 million on sales and marketing in the most recent quarter.
That has been the trend for years, with no apparent end in sight. The company is yet to become profitable, and investors have no guarantee it ever will unless more states loosen their gambling laws.
The stock is struggling a little at the moment at just $13.82, down from $27.77 at the beginning of the year. Now looks like a good time to buy, if you fancy a gamble over the long term.
What To Look For In Stocks Under $20
- Desirable service or product- At its most basic, successful stock market investments are about picking a company that sells a product or a service that is in demand. Not only does it need to be in demand now, but you ought to look to the future too. Is there going to be increased demand for the company’s goods or services in the next few years to help drive growth?
- Analyst Ratings- Stocks under $20 can be more tricky to judge than most, as many have high liquidity. Therefore, it’s a good idea to pay heed to the professional analysis of the experts- they’ve invested a lot more time and effort into understanding the stock market than you. A good review from a reputable analyst can cause a buying frenzy which will drive up prices, so if you get in there early enough you could stand to profit.
- Sound Financials- It goes without saying that you’ll want to review a company’s financial profile closely before investing. There are a few different metrics that investors use, including price-per-earnings, which investors typically view as the lower the better. There’s also earnings per share or EPS- try to look for companies with an EPS that you do not feel reflects the future growth potential for the company.
Frequently Asked Questions
Are Stocks Under $20 Worth Buying?
It’s worth noting that stocks under $20 have a degree of inherent risk. Whilst some stocks at this price point are just beginning to get off the ground, and could go on to be worth significantly more, others could very well be sliding the other direction.
That’s why doing your research on stocks under $20 is crucial. Having a thorough understanding of the company you are investing in is always a good thing, but that is especially important at lower price points.
Do Cheaper Stocks Make More Money?
Not necessarily. It is true that the lower the price the greater the chance of much increased returns. For example, a $1 stock is more likely to double in value over a relatively short period of time than a $100 stock.
Nevertheless, it’s far from that simple, as many cheap stocks are cheap for a reason- they’re not very successful. Some Investors also warn that investing in cheap stocks isn’t always a smart move, and can in fact end up robbing investors of returns
Are There Stocks Under $10?
Yes, there are. Stocks trading at per share or less are known as penny stocks (see also ‘How Can Money Be Made Quickly In Penny Stocks?‘). These are high-risk securities with small market capitalizations. They normally trade outside of major market exchanges, however.