People are always coming up with excuses not to invest, which likely comes down to widespread misconceptions about how the market works. The road towards long-term wealth starts with discipline and a willingness to learn, and the truth is anyone can get started regardless of their experience levels. One of the most common reasons new investors hold back from adding exposure to equities is the idea that they need a large amount of money to get started.
The beauty of the market is that there are plenty of attractive businesses at different price points, which means anyone can find a stock that meets their budget. New investors might be surprised to learn that there are some truly great buying opportunities in stocks that are priced under $100 per share. Whether you are interested in market-leading dividend payers, recent IPOs, or strong sector ETFs, there’s plenty of great options for those that want to invest without having to break the bank. That’s why we’ve put together the following list of the top 3 stocks under $100 to buy now.
Let’s take a further look at what makes these stocks worth adding below.
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The Mosaic Company (NYSE: MOS)
Dividend stocks are typically known to be slow movers, but that hasn’t been the case with this leading fertilizer and agricultural chemicals company, which has rallied over 24% the past month. The Mosaic Company is the world’s largest combined producer and marketer of concentrated phosphate and potash crop nutrients, which are fertilizers are used to support plant growth and can help farmers to increase their crop yields. That means that this company plays a key role in the agriculture industry around the world, and business is currently booming thanks to rising crop prices and plenty of global demand.
It’s worth mentioning that The Mosiac Company is investing in a new potash mine at Esterhazy, an area of Canada that is one of the best ore deposits in the world, which should ultimately lead to cost reductions and stronger earnings. The stock offers a 0.72% dividend yield at this time, and the company’s management recently authorized a $1 billion share that should also help to boost the share price in the coming months. As the stock consolidates around all-time highs, it’s a strong option to consider given the recent strength in the chemicals sector.
New IPOs are another area of the market for investors to explore if they are interested in stocks under $100 a share, and Dutch Bros Inc has been a recent standout. The company, which is an operator and franchisor of drive-thru shops offering coffee and other customizable hot and cold beverages, stands out as a potential long-term winner given the growth prospects of the specialty coffee market. The company reported its fourteenth consecutive year of same shop sales growth in 2020 and increased its shop count from 254 to 471 between the years 2015 and 2021. While you might be thinking that Dutch Bros will have a hard time taking market share from Starbucks, it’s important to note that there are a few differences in each company’s business model.
Dutch Bros is more focused on quick-serve drive-thru sales versus Starbucks that provides a unique in-store experience. The company’s drinks also tend to be less expensive than Starbucks and come in a wider variety of customization options, additional factors that might be attractive to new customers. We know how popular coffee is in the United States, and there’s more than enough room for several successful franchises, which is why Dutch Bros is an attractive option for investors to consider. Keep an eye on how the stock handles its post-IPO high of $62 a share.
SPDR Series Trust S&P Homebuilders ETF (NYSEARCA: XHB)
ETFs are another good option for investors that are working on a tighter budget, as these securities provide an easy way to get diversified exposure to the best companies in a specific sector without having to pay up for each one of the individual stocks. The homebuilders, which offer a way to take advantage of the recent strength in the housing market, stand out as they have been consolidating for months and could be gearing up for another rally. That’s why investors should consider the SPDR Series Trust S&P Homebuilders ETF, which provides exposure to sub-industries like Home Building, Building Products, Home Furnishings, Home Improvement Retail, Home furnishing Retail, and Household Appliances.
Investors can gain add pieces of high-quality companies like Lowe’s, Builders FirstSource, Home Depot, Williams Sonoma, Masco Corporation, Lennar Corporation, and D.R. Horton by adding shares of this ETF. What’s also nice is that this ETF offers a dividend yield of 0.56% and just retook all of the major moving averages, making it a rock-solid pick under $100.