10 Cheap Stocks to Buy for $10 or Less
If you're willing to take on the risk of owning cheap stocks, these 10 picks are all priced under $10.
First things first: Cheap stocks are not necessarily better stocks.
But with the S&P 500 Index down double digits so far in 2022, many investors have seen their portfolios decline in value. And one opportunity that comes from a less favorable environment on Wall Street is the presence of more cheap stocks.
Some investors choose to avoid stocks under $10 – and for good reason. These names are risky and volatile, and are often facing weak fundamentals. But others love cheap stocks for their affordability factor and their ability to reap big gains in a short period of time (though, this also means investors can suffer big losses in a hurry).
If you're one of those people looking to add some lower-priced investments to your portfolio, here are 10 cheap stocks under $10 to consider. The following picks all have something to offer: Some are stable low-priced stocks with healthy dividends, while others are tech companies with growth potential in a digital age. And some are simply bargains after recent declines.
But remember, cheap stocks move quickly, so if you decide to invest in them at all, do so in small amounts that you can afford to lose.
Data is as of Aug. 30. Dividend yields are calculated by annualizing the most recent payout and dividing by the share price. Stocks are listed in reverse order of dividend yield.
Payoneer Global
- Market value: $2.3 billion
- Dividend yield: N/A
Payoneer Global (PAYO, $6.52) is perhaps the most aggressive name on this list of cheap stocks. PAYO is a mid-sized technology solutions provider that is currently running at a small loss as it invests in growth. However, it's also plotting a 20% growth rate in revenue both this year and next as it continues to connect with new customers.
In a digital age and amid the rise of mobile and cashless transactions, PAYO has a great tailwind for its business. The firm is not like consumer-facing brand PayPal Holdings (PYPL), but is instead focused on B2B operations. Specifically, Payoneer's technology is built for international payments, managing a digital business, or accessing capital to open up new opportunities.
Shares are down 11.3% for the year-to-date, but PAYO has shown strong momentum during the summer months. The fintech stock has nearly doubled from its 52-week low in May, and continues to push higher amid hopes of a recovering global economy.
Sirius XM Holdings
- Market value: $23.8 billion
- Dividend yield: 1.4%
A host of business models have been disrupted by the evolution of smartphones and streaming media, but satellite radio provider Sirius XM Holdings (SIRI, $6.11) has shown that it is a stock with staying power. In an era where consumers are drowning in content choices, SIRI continues to stay relevant.
It hit a bit of a snag after the pandemic first hit in 2020, as a lot of its business depends on trials in new cars to connect with new customers. A downtrend in sales along with higher cancellation rates as people stayed at home really hurt the bottom line.
But these days, Sirius XM is holding up pretty well with more than 34 million paid subscribers, an improvement over the 30 million it had at the start of 2020. This proves it hasn't just clawed back old listeners, but has actually grown its base.
Revenue and profits are growing at fairly modest rates, but the margins are great as Sirius expects to generate more than $1.5 billion in free cash flow this year. This is enough to offer a decent 1.4% dividend to shareholders and maintain its $2 billion stock buyback program.
Shares are slightly lower for the year-to-date, but that's still an accomplishment considering the volatility we've seen for the broad market and some consumer-oriented names in particular. For investors seeking out the best cheap stocks, SIRI is definitely one to keep on the radar.
ADT
- Market value: $6.7 billion
- Dividend yield: 1.8%
ADT (ADT, $7.40) is most widely recognized from its long-standing home security brand. However, the company does more than just alarm systems these days. It also provides additional automation, safety and "smart home" solutions. These include fire detection, video surveillance and access control systems like thermostats and wireless connectivity.
Founded way back in 1874, ADT has seen plenty over the years and has managed to evolve with consumer tastes and technology. But there's perhaps no greater signal of its efforts to stay relevant than the 2020 announcement of a partnership with Alphabet (GOOGL). The ADT + Google deal is backed by a $450 million initial investment in ADT that translates into a roughly 6% ownership stake at the moment. And if it goes well, we can expect further investments going forward.
More recently, ADT unveiled a machine learning and mobile-app integration partnership with Ford Motor (F) to provide a security and safety monitoring. The joint venture is known as Canopy, and plans to launch its multi-sensor security sensors early next year. That proves this is not a company that's standing still.
ADT has seen significant improvements in both its top and bottom lines over the last year, swinging from a loss of 25 cents per share in fiscal 2021 to projections of 61 cents in earnings per share this year. That's in part thanks to an impressive revenue growth rate of about 20%.
As with many other cheap stocks, shares have been volatile, and are slightly in the red on the year. Still, ADT is up about 25% from its summer lows as the stock looks to finish the year strongly thanks to improving fundamentals.
Yamana Gold
- Market value: $4.3 billion
- Dividend yield: 2.5%
There's not a whole lot of complexity to mining firm Yamana Gold (AUY, $4.51). The Canada-based company boasts nearly 14 million ounces of proven gold reserves and another 111 million ounces of silver to make it a direct play on precious metals.
In an age of runaway inflation, there's a lot to be said about investing in a gold stock like this. As AUY brings those goods to market, it will cash in – and considering the massive reserves it owns underground, there's little risk of it going under anytime soon.
That doesn't mean it won't see ups and downs. Like all commodity stocks, metal producers like AUY can be volatile due to short-term market dynamics. However, in the near future, we are set to see persistent inflation lifting prices of gold and silver – and boosting this mining stock in kind.
As proof, shares are up by about 7% year-to-date in 2022. Furthermore, dividends have increased significantly, from a penny per share in late 2019 to 3 cents per share in AUY's June 2022 distribution. That might not sound like much, but considering this low-priced stock is trading in the $5 range, that's good for a 2.5% yield– well above the S&P 500's current 1.6% yield.
Even if we see inflationary pressures abate and prices on precious metals roll back again, investors can have confidence in the gold and silver stockpile of Yamana. And with a decent dividend, there's incentive for investors seeking the best cheap stocks to buy and hold this one through any short-term volatility.
Itaú Unibanco
- Market value: $50.3 billion
- Dividend yield: 2.8%
If you couldn't guess from the name, Itaú Unibanco (ITUB, $5.13) is one of a handful of international companies on this list of cheap stocks under $10. Specifically, ITUB is a major bank headquartered in Brazil.
ITUB offers business and consumer banking services in the region, including basic savings accounts and credit cards to business solutions, mortgage lending and investment management.
This was a pretty rough business to be in a few years ago as Brazil's economy struggled amid government scandals. And just as the nation looked to move past that upheaval, the pandemic hit, causing a recession that didn't end until late 2021.
But Brazil's economy is back on track, with gross domestic product (GDP) growing at a faster-than-expected pace in Q2. This local bank has been recovering in kind, with shares up 40% for the year-to-date.
Emerging markets stocks can always be risky bets, but Brazil is the largest Latin American economy, almost 25% larger than #2 Mexico. Investors looking to play the long-term growth potential of this region could do worse than betting on this cheap stock that is one of the biggest financial firms south of the border.
Kosmos Energy
- Market value: $3.2 billion
- Dividend yield: 2.8%
Kosmos Energy (KOS, $7.08) is a deep-water oil and gas exploration company. As such, it has had a pretty good year thanks to strong energy prices. And the "new normal" of persistently higher crude oil prices – even after recent rollbacks – means that KOS can keep drilling at comfortable margins for the foreseeable future.
As you can imagine, the price of drilling offshore is much more expensive than drilling on land. Dallas-based Kosmos operates on the margins of the Atlantic Ocean around the world. This includes operations off Ghana, Equatorial Guinea, Senegal and Mauritania, in addition to the Gulf of Mexico off the coast of the U.S.
The surge in oil prices has allowed KOS to swing from a modest loss in 2021 to projections for earnings per share of $1.05 this year. And analysts are projecting EPS of $1.42 in fiscal 2023, even with crude oil down a bit from its summer highs. In fact, while some energy stocks have lost steam lately, KOS is up almost 50% from its July lows and is showing strong momentum as it charges into the end of the year.
There's definitely risk here, as energy prices – and cheap stocks – can be quite volatile. But analysts at both Barclays and Berenberg raised their outlooks on Kosmos Energy in August on the notion that macroeconomic factors will help support cash flow for the foreseeable future.
NL Industries
- Market value: $437.4 million
- Dividend yield: 3.1%
You might think NL Industries (NL, $8.96) isn't a particularly sound investment right now as it is a rather mundane manufacturing name that is valued at only $450 million or so. However, while the broader equities market hasn't been particularly kind to risky small caps in 2022, NL has shown that it has the numbers to attract investor interest.
NL, along with subsidiary CompX, largely produces locksets and auto parts. These include conventional locks for doors and filing cabinets, as well as electronic locks and sophisticated systems for medical offices and automotive applications. It also makes auto parts, marine parts and titanium dioxide pigments that make that vivid white color you see on appliances, vehicles and other products.
All that isn't a particularly glamorous allotment of business lines, to be sure. But demand has steadily recovered in the wake of the pandemic – as has NL's pricing power. The company is projecting roughly 55% growth in earnings per share this fiscal year, and has raised its quarterly dividend from just 4 cents per share in 2020 to 7 cents per share at present. On top of that, it paid a generous special dividend of 35 cents per share to investors this summer thanks to "excess cash flows."
Most importantly, shares have tacked on 23% year-to-date, proving that this humdrum small cap can still outperform even in a challenging stock market environment. If you're primarily interested in cheap stocks with potential, you could do worse than NL.
ASE Technology
- Market value: $12.3 billion
- Dividend yield: 5.3%
Taiwan semiconductor manufacturer ASE Technology Holding (ASX, $5.74) is not a big-name, branded chipmaker like Intel (INTC) or Broadcom (AVGO). Instead, ASE is involved in services like packaging and testing circuits. And it doesn't actually design specialty semiconductors on its own.
This lower-margin business doesn't create the big paydays of having a proprietary chip that delivers huge profits when it's in favor. But, since ASX doesn't have to sweat the research side or the marketing of patented semiconductors, it has much more stability.
And though smaller than major chip foundries and design shops, it's still fairly well capitalized, with a $12 billion market valuation right now and annual revenue north of $20 billion. Furthermore, this specialized tech company is in high demand amid supply-chain bottlenecks – allowing it to command higher rates for its services, which is driving revenue slowly but surely higher.
The company's reliable revenue also fuels a big one-time dividend each year, which is admittedly infrequent, but adds up to a generous 5.3% payout based on its June distribution. You'll have to hang on for a while to see another payday, but the outlook for ASE Technology right now could make that a worthwhile endeavor for investors seeking out the best cheap stocks.
Prospect Capital
- Market value: $2.8 billion
- Dividend yield: 9.2%
Perhaps understandably, it has been a less-than-stellar environment over the past few years for some asset management firms. The booming initial public offering (IPO) market that we saw in prior years has all but dried up, the stock market has gone "risk off," and rising interest rates mean the cost of borrowing for big-ticket deals is significantly higher than back in the good old days of ZIRP (zero interest-rate policy).
That said, Prospect Capital (PSEC, $7.25) is a cheap stock that still has something to offer investors looking for a way to play the investment banking corner of Wall Street.
As a business development company, or BDC, Prospect provides capital to middle-market companies for the purpose of refinancings, leveraged buyouts, acquisitions and restructurings. Since going public in 2004, Prospect has made nearly 400 individual investments totaling roughly $20 billion – and considering the rather rough environment lately, there are plenty of new targets that PSEC now has in its sights to recapitalize or restructure.
The current portfolio consists of nearly 130 companies spanning 39 separate industries, providing investors with deep diversification to help smooth out any bumps in the road.
And like most investment managers, PSEC delivers a steady stream of profit-sharing dividends back to shareholders based on its performance. Prospect shares are down around 14% in a difficult market. But its monthly dividends currently yield an impressive 9.2%.
Oaktree Specialty Lending
- Market value: $1.3 billion
- Dividend yield: 9.7%
Taking its roots from the business of famed junk bond investor Howard Marks, Oaktree Specialty Lending (OCSL, $6.92) is a financial firm that profits off of its investments in other companies. Structured as a BDC, or business development company, it operates much like a hedge fund or a private equity firm. The difference, of course, is that it's a cheap publicly traded stock under $10 – so even small-time investors can get a piece of the profits generated by Oaktree's strategy.
That strategy involves financing upper-middle market companies. That means "goldilocks" firms that are neither too big to require massive capital, nor too small to make them overly risky; we're talking roughly $100 million to $750 million apiece. This sweet spot of financing typically generates good returns as the firms are too big to obtain the loans they need at local banks via conventional financing, but still too small to be a priority for major Wall Street investment banks running bond offerings for blue-chip stocks.
Additionally, more than half of OCSL's portfolio involves first lien loans, meaning it is the primary lender and the first in line to get paid in the event of trouble. That helps mitigate risk of default.
Admittedly, OCSL stock itself doesn't move massively, but considering shares are down "only" 7% so far in 2022 – better than the S&P 500's more than 16% decline – that could be considered a plus.
Furthermore, much like the junk bonds that Marks built his career on, Oaktree stock does deliver a reliable and generous return as the interest payments on the loans are redistributed to shareholders. Right now, OCSL delivers a massive dividend yield of 9.7% – the highest of all the cheap stocks featured here.
