Best Stocks Under $50

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Contributor, Benzinga
February 25, 2024

Invest in the best stocks under $50 with Interactive Brokers for fast trade execution.

You don’t need thousands of dollars in the bank to get started investing. Just $50, or less, can help you buy shares of companies with plenty of potential to expand in the future. That's why it will help you to learn about the best stocks under $50 so that you can save some money while accessing better-performing assets.

Should you add higher-priced stocks to your watchlist? Has an investment advisor recommended high-value stocks with growth potential? What should go on your watchlist? Is a buy rating enough to make a move on the stock market today? Are you buying up assets that have room to grow, or are you swing trading with pricier stocks?

Every stock has to start somewhere — consider these top choices under $50 to begin your investment portfolio with stocks poised for future growth. We’ll also help you start investing earlier with a few of our favorite brokers and we’ll introduce you to a few factors you’ll want to consider when you select the assets you prefer to include in your portfolio. 

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Session: Feb 22, 2024 4:00PM EST - Feb 23, 2024 3:59PM EST

Taking a Look at Stocks Under $50

When most people think of investing, their minds immediately go to buying and selling shares of stock. But what exactly is a stock and what makes investing in stocks a good idea? Market insights would indicate that some stocks linger around their current price while others can continue to grow because those businesses have immense growth potential?

When you invest in a share of stock, you purchase a small portion of a publicly-traded company. While this doesn’t entitle you the same control and rights as the company’s CEO or board members, it does grant you voting rights on future executive changes and other public decisions in most circumstances. You can earn a return on your investment by waiting until your stock increases in value, collecting dividends paid out by the company that issues the stock, or both.

Additionally, interest rates impact pricing, meaning that the stock market will shift—and alter the value of your portfolio. Because Wall Street is so susceptible to these shifts in the greater economy, you want to look for more than the share price.

Take a look at a dividend stock that can produce income in the future. You may want to start filling your retirement account, or you may have designs on value stocks that help diversify your portfolio that much faster.

Most stocks under $50 are issued by small-cap corporations. Small-cap corporations usually have a total market capitalization of less than $2 billion but more than $300 million. You can calculate a company’s market capitalization by multiplying the total number of shares of stock outstanding by the company’s current price per share.

As a result, you can see “where the money’s going”. At the same time, some stocks split, prices drop and you can buy into a large or mega cap firm once again. Look quite carefully at the assets you purchase because they could change at any moment, even if they seemed like a sure thing yesterday.

Although small-cap stocks do offer more room for return and profit when compared to larger cap competitors, investing in these types of companies can also result in multiplied losses if the value of your investments decreases. We recommend diversifying your portfolio with a blend of small-cap stocks with potential and large, well-established names on the market to protect your investment and limit the risk of loss in the event that a company you invest in goes bankrupt or sees a bad quarter. 

Compare Online Brokers for Stocks Under $50

Before you can begin investing in any type of stock, you’ll typically need to open an account with a broker. A broker is a financial company that provides you with access to an online trading platform that you can use to buy and sell shares. When you place an order through your brokerage platform, the broker will execute the order using your instructions, sometimes in exchange for a fee or commission.

The broker that you choose will determine how much you pay per trade, the type of platform you can use, the type of orders that you can place, the markets you can trade on and more. Taking a bit of time to compare brokerage platforms can ensure that you’re getting the best possible trading experience depending on your needs and level of experience as an investor.

Not sure where to begin your search? Explore a few of our favorite brokerage options below, remembering that the brokerage you choose is often more important than the Dow Jones Industrial Average. If you ever feel your current brokerage isn’t serving you, feel free to make a change to another broker on this list. Many investors keep multiple accounts so that they have options, or you may choose to keep specific holdings with a broker that benefits those holdings and those holdings alone.

Features to Look for in Stocks Under $50

With thousands of stocks under $50 on the market, how can you narrow down your options and choose which stocks you want to invest in? Though there is no foolproof method that you can use to select stocks that will increase in value, start by searching for these common characteristics.

Trades on a Major Exchange

Companies that issue stock that trades on a major exchange (like the Nasdaq or NYSE) must meet a certain set of financial reporting criteria that are not required when trading on smaller exchanges. Protect your investment by investing in companies that trade on major exchanges when getting started.

Almost every publicly traded company carries some form of debt. Instead of looking at the dollar amount of debt carried by a company, take a look at how its debt is changing over time. Companies that are making progress toward reducing their debts are often in a much better position in terms of future growth when compared to companies that are actively taking on more debt.

Smaller companies are in a much more advantageous position when it comes to year-after-year growth. Take a look at each company’s revenue and earnings trends and search for investment opportunities with positive growth trends. You may, however, need to be patient while investing for value and awaiting future growth.

You can also take a look at industries that may interest you, like:

Adding Larger Stocks to Your Portfolio

No matter if you’re looking to take a long-term approach to investing or you’re searching for stocks that you can use to capitalize on market volatility, stocks under $50 can be a great complement to any portfolio. At the same time, you must budget properly before spending this much on a stock and only invest money you’re prepared to lose.

While you can often use this volatility to your advantage, these stocks can also present greater risks. If you do decide to invest in any type of stocks, be sure to do your due diligence and perform your own research before you buy or sell any asset. You can read more through the Securities and Exchange Commission or Benzinga’s wealth of information like a deeper dive into online brokers.

Frequently Asked Questions

Q

Are cheap stocks good?

A

Yes, cheap stocks can be a good investment  if you find a new company that has a promising future.

Q

Can I become an investor with not much money?

A

Yes, you can begin investing by buying shares of companies that aren’t expensive.

Q

What are the best stocks under $50?

A

Benzinga offers a list of the best stocks under $50 above. These stocks often change as some drop off and others skyrocket in value.

About Sarah Horvath

Sarah is an expert in the insurance, investing for retirement and cryptocurrency space.