It’s possible to find expensive stocks trading for less than a dollar and cheap stocks trading for hundreds of dollars a share. The valuation of the stock has little to do with its price range, and while the price tag itself shouldn’t be a criterion when choosing the right stocks for your portfolio, it can be a preference.
So, if you prefer to buy stocks that are trading for less than $10, there are three no-brainer options you may want to look into.
If you are interested in ESG (environmental, social, and governance) investing and wish to diversify away from renewables, Ballard Power Systems (TSX:BLDP) is a stock worth considering. It’s one of the largest fuel cell companies in Canada and has developed a range of clean energy solutions around fuel cell technologies.
This includes transportation and backup power. Even though fuel cell technology is quite mature and fuel cell-based vehicles have been on the market for years, they haven’t seen penetration on the same scale as electric vehicles (EVs).
The reason is the fuel: hydrogen, which is still difficult and expensive to store and transport. However, once this puzzle is solved, companies like Ballard Power may experience explosive growth because it has several practical advantages over traditional EVs and battery-based power solutions.
The stock is currently trading at $4.3 per share, but with the right catalyst, it can easily rise to double or even three digits, given enough time and the right circumstances.
One small-cap real estate investment trust (REIT) that you may consider buying for its dividends is PRO REIT (TSX:PRV.UN). The REIT has a portfolio of 126 industrial, retail, and office properties, with an occupancy rate of over 98%. Over 70% of the rent comes from its industrial properties, and over half of its portfolio (about 75 properties) is in Atlantic Canada.
The REIT is currently trading at $5.5 per share, which is a hefty enough discount from its pre-pandemic price tag of $7.5 per share. One major benefit of this discount is that its yield has risen as well, and it’s currently at 8%, making it an attractive pick from a passive-income perspective.
Iron is not the first metal that comes to mind when you think about mining stocks in Canada, thanks to the abundance of gold mining companies based or operating in the country. Technically speaking, Champion Iron (TSX:CIA) is not a Canadian company. It’s based in Australia but operates almost exclusively in Canada, primarily in Quebec.
It’s a strong global player in high-quality iron ore production, but that’s not the only reason it’s a no-brainer pick for stocks under $10.
Even though the growth has been shaky, the stock has risen over 400% in the last five years, and if it continues to grow at this pace, it can give your portfolio a significant boost. The growth is the primary reason to consider this stock, and the dividends it’s currently paying at a 3.3% yield can be considered the cherry on top.
- We just revealed five stocks as “best buys” this month … join Stock Advisor Canada to find out if PRO REIT made the list!
The three under $10 stocks have their own strengths and risks, and you should strive to understand them to ensure whether or not they are the right additions to your portfolio. Collectively, they offer a healthy mix of dividends and capital-appreciation potential.