Best Stocks Under $100

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Contributor, Benzinga
January 6, 2021

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Morgan Stanley (XNYS:MS)

Morgan Stanley is a multinational finance company and investment bank. Morgan Stanley rebounded exceptionally well since the onset of the COVID-19 pandemic, and its stock price fully recovered. 

Morgan Stanley has maintained a positive earnings trend for the last 4 years, even through the pandemic. The company received a “Buy” or “Strong Buy” rating from 16 out of 27 investment advisors according to its Yahoo Finance profile. 

Morgan Stanley
(NYSE:MS)
$87.035
-0.475[-0.54%]
Last update: 1:55PM (Delayed 15-Minutes)
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Day Range86.71 - 88.0152 Wk Range72.05 - 109.73Open / Close86.9 / -Float / Outstanding- / 1.7B
Vol / Avg.3.2M / 7.7MMkt Cap147.1BP/E12.750d Avg. Price84.1
Div / Yield3.1/3.54%Payout Ratio41.73Total Float-EPS-

Upwork (XNAS:UPWK)

Upwork is a freelancing platform that connects business owners with artists, writers, coders and other gig workers remotely. Upwork’s stock exploded after the 2020 lockdown and has seen a solid incline in price since October 2020. As more companies extend their work-from-home policies, Upwork might be in a position to expand even more in the future. 

Upwork
(NASDAQ:UPWK)
$10.97
0.06[0.55%]
Last update: 1:55PM (Delayed 15-Minutes)
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Day Range10.7 - 11.0952 Wk Range10.84 - 38.87Open / Close10.82 / -Float / Outstanding- / 131.3M
Vol / Avg.491.2K / 1.6MMkt Cap1.4BP/E-50d Avg. Price13
Div / Yield-Payout Ratio-Total Float-EPS-

HUYA (XNYS:HUYA)

Video game stocks have been another winning sector since the onset of the COVID-19 pandemic. Huya is a Chinese company that provides users with a platform to stream and watch video games. 

The company has recently completed a merger with competitor DouYa, which can further solidify its position as the country’s leader in gaming streaming. With consistent earnings and a new partnership that will help cut internal expenses, Huya is in a good position to capture even more of China’s growing eSports market. 

HUYA
(NYSE:HUYA)
$2.52
-0.17[-6.32%]
Last update: 1:54PM (Delayed 15-Minutes)
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Day Range2.48 - 2.6252 Wk Range1.64 - 8.12Open / Close2.62 / -Float / Outstanding- / 239.5M
Vol / Avg.1.2M / 1.3MMkt Cap603.5MP/E-50d Avg. Price2.23
Div / Yield-Payout Ratio-Total Float-EPS-

Booz Allen Hamilton (XNYS:BAH)

The Booz Allen Hamilton Holdings Company is a management and consulting service providing services to defensive departments of the United States. The company has a long history of steady stock price increases as well as solid EPS values. 

Booz Allen’s revenue vs. earnings results show that the company has seen a consistent increase in profits yearly since 2017. It also provides an attractive yet stable dividend yield of 1.44%. 

Booz Allen Hamilton
(NYSE:BAH)
$106.76
-0.85[-0.79%]
Last update: 1:55PM (Delayed 15-Minutes)
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Day Range106.55 - 108.5652 Wk Range69.68 - 112.55Open / Close107.65 / -Float / Outstanding- / 132.2M
Vol / Avg.285.3K / 1MMkt Cap14.1BP/E27.3150d Avg. Price102.81
Div / Yield1.72/1.60%Payout Ratio42.13Total Float-EPS-

eBay (XNAS:EBAY)

As an original ecommerce websites, eBay maintains a top position as more and more shoppers order online. eBay’s stock has seen consistent and steady growth since the stock market crash in March. 

eBay’s consumer-to-consumer model seems to have filled a hole in the online marketplace for collectors and casual shoppers alike. eBay also recently gained a major boost of cash from the sale of its StubHub, an online platform that helps shoppers find tickets to concerts and events.

eBay
(NASDAQ:EBAY)
$43.515
0.165[0.38%]
Last update: 1:55PM (Delayed 15-Minutes)
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Day Range42.96 - 43.9152 Wk Range35.92 - 67.71Open / Close43.1 / -Float / Outstanding- / 542.7M
Vol / Avg.3.3M / 6.1MMkt Cap23.6BP/E-50d Avg. Price40.96
Div / Yield0.88/2.03%Payout Ratio-Total Float-EPS-

Do you think that you can’t start investing because you don’t have thousands of dollars to spend right now? Think again! Every company needs to start somewhere — and for just $100 or less, you can own a portion of a company with high growth potential.

Our guide will introduce you to a few of our favorite companies with stock prices under $100 a share. We’ll also introduce you to a few of our favorite brokers and share a list of characteristics to look for when you consider which companies are worth the investment. 

Overview: Stocks Under $100

When most people think about investing in the stock market, they imagine million-dollar corporations like Amazon.com and Apple. However, you don’t need to have thousands of dollars in the bank to get started investing. There are plenty of stocks under $100 that have major potential to grow and increase in value.

When you buy a share of stock, you buy a small piece of a publicly-traded company. Corporations offer shares of stock in order to gain capital for upcoming projects, pay off debt, or expand into a new market. 

Most corporations begin selling shares of stock with an “initial public offering” or “IPO” for short. After an IPO, a company’s stock can be bought and sold by investors each day the stock market is open. Many investors hold onto shares of stock for years on end.

There are 2 ways that you can earn a return on your investment when you buy stock:

  • The stock increases in value. The primary way investors earn returns on their investments is by holding onto their stocks until they increase in value. Though it’s entirely possible that your investment will decrease in value, the stock market on average has a long history of increasing in value by 7% to 8% annually after accounting for inflation.
  • The stock pays out dividends. A dividend is a small share of a company’s earnings that it pays out to investors in exchange for holding stock. Though not every company chooses to offer dividends, many do to encourage investors to buy and hold onto their shares of stock.

As the title suggests, a stock under $100 is a stock with a per-share price of less than $100. Companies that issue shares of stock valued at less than $100 tend to be smaller companies when compared to most mega cap corporations. 

Best Online Brokers for Stocks Under $100

You can buy and sell stock through a stockbroker. A broker is a company or online exchange that allows common investors to buy and sell shares of stock, sometimes in exchange for a fee or commission. The broker that you choose can play a major role in the platform that you trade on and your overall return on your investments. 

Some of the features you might want to consider before you open an account with a broker include:

  • Your broker’s tools and platform. The broker you open an account with will provide you with a platform that you can use to place buy and sell orders. If you’ve never invested before, you may want to choose a broker that caters to users opening their 1st brokerage account.
  • Fees and commissions. Though many brokers now offer commission-free trading, you shouldn’t assume that your broker will provide you with services for free. A broker might charge you a fee per trade or an annual account maintenance fee. Be sure to check each broker’s pricing schedule and know your fees before you open an account.
  • Market access. Almost every broker will provide you with comprehensive access to the US stock market. However, some brokers will also offer access to cryptocurrency trading, forex and international markets. If these are important for you, be sure to choose a broker that offers more market access.
  • Account minimums. Some brokers require you to make a minimum investment when you open your brokerage account. If your broker has an account minimum, be sure that you can meet it before you apply for your account. If you only have a few dollars to invest, you’ll usually want to search for a broker that offers $0 account minimums.

Not sure where to begin your search for the perfect broker? Consider a few of our favorite options below. 

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Features to Look for in Stocks Under $100

While there is no guaranteed way to separate the winners from the losers, there are a few key characteristics to look for when you’re investing in the stock market. Before you buy stock under $100, be sure to look for these features.

  • Trends in growth. Publicly traded companies must publish earnings and profit every quarter. Before you invest in a stock, take a look at the company’s earnings over time. If a company’s earnings seem to be increasing each quarter (even by a small margin) is a good sign that the company is doing something right.
  • Proportionate debt-to-income ratio. Almost every company of every size carries some form of debt. What’s important when comparing companies is that the debt of the stock you’re buying is proportionate to its income. You can calculate a company’s debt-to-income ratio by dividing the company’s total liabilities by the total amount of shareholders’ equity.

What’s a good debt-to-income ratio? The answer might vary depending on the industry you’re investing in. For example, the construction industry relies heavily on debt funding, which typically means a higher debt-to-income ratio. Compare the debt-to-income ratio of the company you’re thinking about investing in with a few competitors in its industry to get a better feel for the company’s financials.

  • Dividend history and yield. Very few companies are required to pay out dividends to their shareholders. This means that if a company offers a dividend, it can be an indicator of financial health—especially if the company has paid out its dividends consistently, year after year.

Be wary of companies with high dividend yield. A dividend yield is calculated by dividing the annual dividend paid out by the company with the current price of a share of the company’s stock. Companies that increase dividends are often desperate for investors or are headed for future financial trouble because they aren’t investing enough money in maintenance and growth. 

As a general rule, you should be hesitant to invest in any company that has a dividend yield above 14%. This dividend level usually cannot be sustained in the long-term, and it may indicate that the company will need to issue a cut to its dividends in the near future as the price of the stock declines.

  • Future plans and strength. The stock market is a volatile entity, and every corporation will lose value at some point or another. What matters is the company’s long-term plans and projections. Take a look at the history of each company you’re thinking about investing in and consider the long-term trends in its stock price and earnings. 

Beginning With Investing 

As you can see, investing isn’t only for people who have millions of dollars to spend—there are plenty of amazing companies with high potential for growth trading at less than $100 per share. Even large investors and investing firms often direct a percentage of their capital to smaller companies.

If you do want to invest in a larger mega cap option, you may want to choose a broker that offers the ability to purchase fractional shares of stock. These brokers allow you to invest in dollars instead of shares — which means that if you only have $10 to invest, you can still purchase a fraction of a share of Apple, Amazon or Facebook stock. 

Contact one of our recommended online brokers to open your account and buy stocks today.