The Smartest Stocks to Buy With $20 Right Now and Hold Forever

These under-$20 stocks have the potential to grow further with time and deliver solid capital gains.

| More on:
Woman has an idea

Image source: Getty Images

The best part about stocks is that anyone can start investing with whatever amount they have. The Canadian stock market has several stocks that are trading under $20 and have the potential to grow further with time. But before I discuss my top picks, investors should take caution and avoid investing in stocks solely based on their low dollar price. Against this backdrop, let’s look at some of the smartest stocks to buy under $20. 


Payfare (TSX:PAY) is a financial technology company that offers digital banking and instant payment solutions to the gig economy workforce. This microcap stock has lost about 50% of its value year to date. While its stock has dropped, it continues to produce strong financial performance, reflecting the strength of its business model amid a weak macro environment. 

Payfare’s revenues are growing rapidly (it marked 183% growth in the third quarter), reflecting a 156% jump in its active user base. Furthermore, the company has been generating positive adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization), and its net loss moderated in the third quarter, which is encouraging. 

The growing demand for food delivery and ride-sharing and its partnerships with leading gig platforms augur well for future growth. Moreover, its recurring revenue streams and low cost of customer acquisitions (it has low marketing costs, as partner gig platforms already have relationships with workers) provide a solid base for growth. Also, new product development, increased penetration, and its asset-light model will support the upside in Payfare stock. 

WELL Health

Like Payfare, Well Health (TSX:WELL) has consistently delivered stellar financial performance. Further, WELL Health has been producing positive adjusted EBITDA over the past several quarters and has raised its guidance for the fourth time in 2022. Despite its strong performance and upbeat guidance, WELL Health has lost substantial value this year, owing to the selling pressure in Canadian technology stocks

This correction in WELL Health stock is an opportunity for buying and holding this stock for the long term. The company has strong growth prospects and will likely deliver solid capital gains in the long run. Its growing omnichannel patient visits and momentum in the high-margin virtual services will likely support its growth. 

This digital healthcare services provider has remained immune to macroeconomic and geopolitical headwinds. Meanwhile, management is confident that the momentum in its base business will sustain. Also, its focus on accretive acquisitions bodes well for growth. WELL Health is trading cheap, and the company expects to exit 2022 on a profitable note, which should boost its stock price. 

Absolute Software

The accelerated pace of digital transformation and increase in cybersecurity threats continue to drive demand for Absolute Software’s (TSX:ABST) security products. Further, its growing enterprise and government customer base provide a solid foundation for growth. While the widening of its loss weighed on its stock price, this pullback is an opportunity to go long. 

Absolute Software’s annual recurring revenues have been growing at a double-digit rate, indicating that the company will continue to generate strong revenues. Moreover, since 2018, its adjusted EBITDA has had an average annualized growth rate of 57%. 

Absolute Software is poised to gain from higher enterprise spending on cybersecurity. Moreover, new customer wins, cross-selling opportunities, geographical expansion, and the strategic acquisition will accelerate its growth and drive its stock price higher.

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 Sneha Nahata has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Absolute Software Corporation. The Motley Fool recommends Absolute Software Corp. The Motley Fool has a disclosure policy.

More on Tech Stocks

A worker uses a laptop inside a restaurant.
Tech Stocks

Why Investors Shouldn’t Give Up on Shopify Just Yet

Here's why long-term investors may not want to throw in the towel just yet on e-commerce juggernaut Shopify (TSX:SHOP).

Read more »

Various Canadian dollars in gray pants pocket
Tech Stocks

3 No-Brainer Stocks to Buy Right Now for Less Than $50

These no-brainer TSX stocks are poised to deliver solid capital gains in the medium to long term.

Read more »

money cash dividends
Tech Stocks

The Best TSX Stocks to Invest $5,000 in Right Now

These Canadian stocks have the potential to beat the broader market averages in the long term and generate solid capital…

Read more »

grow dividends
Tech Stocks

3 Monster Stocks to Buy Without Hesitation

Are you looking for great stocks to buy today? Here are three monster stocks you should buy without hesitation!

Read more »

telehealth stocks
Tech Stocks

WELL Health Stock Zoomed 15% After Earnings: Is it a Buy?

WELL Health stock is reporting record demand as revenue soars and guidance is increased once again.

Read more »

online shopping
Tech Stocks

Is it Time to Buy E-Commerce Stocks?

Are you curious about e-commerce stocks? Find out if I think it’s time to buy them!

Read more »

Growing plant shoots on coins
Tech Stocks

Is Now the Right Time to Buy Growth Stocks?

There are so many growth stocks that investors wish they'd bought back when they were down. Now, they're definitely down,…

Read more »

money cash dividends
Tech Stocks

2 Growth Stocks You Can Buy Right Now with Less Than $100

Given their solid performances, cheaper valuations, and healthy growth prospects, these 2 under-$100 growth stocks look attractive at these levels.

Read more »