Whether you’re just beginning your journey as an investor with limited capital or you simply enjoy hunting for affordable stocks that can turn into lucrative investments, seeking out strong businesses that don’t have a hefty price tag can be a solid strategy. The truth is that you can build a portfolio on any budget if you know where to look. With the valuations of many of the most popular companies in the stock market looking a bit frothy these days, seeking out lower-priced stocks that have long-term potential is a nice alternative.
Below, we are going to take a look at 3 stocks at under $50 a share that investors should consider buying now. Each one of these companies has something unique to offer investors and could end up paying off in a big way over the long term.
Rocket Companies (NYSE:RKT)
The first stock on our list, Rocket Companies, is disrupting the entire mortgage industry with its Rocket Mortgage application. The application helps clients apply for mortgages, deal with documents, complete monthly payments, and even get real-time mortgage quotes. Rocket Companies also owns real estate and financial services businesses that could see strong growth. With mortgage rates at record lows and the Federal Reserve planning to keep them there for the foreseeable future, this company is benefitting from increased demand for refinancing and new home purchases.
Rocket Companies went public in August and shares reached as high as $34.42 back in September. The stock has cooled off and formed a support level around $20, which could provide a nice entry for investors. Rocket Companies recently announced a partnership with Realtor.com that will allow users to connect directly to the Rocket Mortgage application, which could be a rewarding partnership going forward. Q2 earnings were strong for the company, as it reported a year-over-year increase in total net revenue of 268%. It also generated a record figure in closed loan origination volume of $72.3 billion, which was a year-over-year increase of 126% and helps to confirm that the low-interest-rate environment is a huge plus for its business.
Altria Group Inc (NYSE:MO)
While I’m not the biggest advocate of Tobacco products, this stock is worth a look thanks to its great dividend yield and resilience during recessions. Altria is a holding company that has business segments including smokeable products, smokeless products, and wine. One of its wholly-owned subsidiaries, Phillip Morris USA, is one of the largest manufacturers of cigarettes in the USA. Altria also has exposure to e-vapor products and made a $1.8 billion investment in Canadian cannabis company Cronos Group back in 2018, which means investors will get a piece of the burgeoning cannabis market with this stock.
Although there has been a secular decline in cigarette smoking, there’s certainly value in owning a defensive name that will still provide investors with reliable income during an uncertain economic period. During the first half of 2020, Altria held its own as the pandemic swept the nation and was able to grow adjusted diluted earnings per share by 8.5% year-over-year and revenues by 3.9% year-over-year. The company also announced a dividend increase of 2.4% in Q2 marking the 55th dividend increase for the company over the last 51 years. With a dividend yield of 8.39% and a diversified portfolio of products, this stock could be a bargain for dividend investors.
If you’re interested in a company that is involved in cloud computing with a stock price under $50, look no further than Cloudflare. It operates a cloud platform that delivers a range of network services to businesses all over the world including 16% of the Fortune 1,000. Cloudflare’s edge-computing services are cutting-edge and are being used to improve websites and network security for companies of all sizes. With so many businesses moving their operations into the cloud, it’s easy to recognize the potential for a company like Cloudflare over the next several years.
As with many of the high growth software stocks this year, Cloudflare stock has been on fire and is up over 160% year-to-date. That makes it a higher-risk investment based on its valuation, but you can’t deny that it’s a stock with serious momentum working in its favor. Cloudflare will report it’s Q3 earnings on November 6th and investors that are interested in the company should monitor the stock in the coming weeks as it might rally up into the release.
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20 High-Yield Dividend Stocks that Could Ruin Your Retirement Portfolio
Almost everyone loves a company that pays strong dividends. Who doesn't like receiving a check every quarter for simply owning a stock--especially if that stock is paying you back 4%, 5% or even 10% of its share price in annual income each year?. In a world where 10-year treasuries are yielding just above 2%, it seems hard to go wrong when buying a stock that's yielding significantly above the going rates on fixed-income assets. Unfortunately, the market rarely offers a free lunch.
While high-yield stocks may have a lot of near-term attractiveness, those same high-yields can often signal significant danger ahead. In some cases, it might mean that the company's dividend will stop growing or won't grow as fast as it used to. Worse yet, the company could cut its dividend, reduce the income you receive from owning the stock and drive down the value of the shares that you own.
4%-plus yields might seem like an easy opportunity to boost the investment income you receive, but high-yield stocks can just as often be a track reading to snare unsuspecting investors. It's not always easy to tell the difference though.
This slideshow highlights 10 high-yield dividend stocks that are paying an unsustainably large percentage of their earnings in the form of a dividend. These companies are all paying out more than 100% of their earnings per share in the form of a dividend, a sign that the advertised high-yield probably won't last.
View the "20 High-Yield Dividend Stocks that Could Ruin Your Retirement Portfolio".