There are stocks on the TSX that are expensive, reasonably priced, undervalued, and cheap. However, there are ludicrously cheap stocks that can be purchased for less than $10.00 per share. Interestingly, many investors build their portfolios on these stocks. The gains could be comparable to some dividend-paying stocks.
More important is that you’re spending money on good investments. The companies are well established and capable of fulfilling the financial goals of budget-conscious investors.
Chemical solutions in the oil and natural gas industry
CES Energy Solutions Corp. (TSX:CEU) is a leading provider of technically advanced consumable chemical solutions throughout the life-cycle of the oilfield. The services are concentrated in the North American oil and natural gas industry. Not too many investors are aware of the kind of services CES provides.
The $572 million company has been existence since 1986. Drilling fluids and producing specialty chemicals for the oil and natural gas producers are the core competencies. The two segments combined can deliver $1.2 billion revenue.
If you try to imagine the magnitude CES Energy’s operations and the revenue stream the business generates, the current price of $2.25 is outrageously cheap. There is extra windfall because the company also pays annual dividend of 2.85%.
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Earn like royalty
A multi-royalty corporation that pays 7.26% dividend will be a top choice of dividend investors. But if the price per share is only $3.08, budget-conscious investors and bargain hunters will line up to receive the royalties.
Diversified Royalty Corp. (TSX:DIV) is in the business of purchasing trademarks of companies then negotiates royalty agreements with them. The Royalty Partners retain full operational control of the business and benefit from the company’s growth. They also get tax relief from the royalty payments made to DIV.
Currently, the company owns the trademark of Air Miles, Mr. Lube, Mr. Mikes, and Sutton. All of the four are top line royalty acquisitions. Analysts are even projecting a price appreciation of 48.3% which is the hefty bonus.
Be a landlord of service hotels in the U.S.
American Hotel Income Properties REIT LP (TSX:HOT.UN) is a limited partnership formed to make investments in hotel real estate properties located in the U.S. If you’re interested in being part owner of 112 premium-branded, select-service hotels in secondary U.S. markets, you can with $6.68 stock investment.
The REIT is unique in the sense that the portfolios are located in larger secondary markets with diverse and stable demand. What makes this cheap stock more attractive is its very high 9.25% dividend yield.
It would be quite an experience owning shares of this REIT that manages mostly upscale hotels in various states of America. You can depend on the proven track record of the company managed by experienced hotel industry leaders.
You can make this a long-term hold too, as American Hotel Income Properties consistently deliver high yields while achieving exponential growth of the portfolio.
The stock market is not exclusive to the rich and wealthy. You can grow your little savings and earn a fortune from good, cheap stocks.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.
Fool contributor Christopher Liew has no position in any of the stocks mentioned.