Best Cheap Stocks to Buy Now (Under $10)

ADT

• Market value: $5.5 billion
• Dividend yield: 2.4%

ADT (ADT, $5.93) debuted as a public company in 2012 as a spinout from industrial conglomerate Tyco to gain capital efficiencies and focus on its unique business model. But over the last decade or so, there hasn't been particularly huge growth for the security stock – particularly in the age of connected devices and doorbell cams, which many feel are adequate replacements for traditional home security systems.

But ADT has evolved, too, partnering with Alphabet's (GOOGL) Google Nest technology instead of trying to outdo its high-tech competitors. In fact, the ADT/Google deal announced in 2020 was backed by a $450 million ownership stake that equates to just under 7% of the company.

ADT might not knock your socks off with surging revenue, but it has what it takes to deliver steady growth over time. Analysts, for their part, expect the company to report modest revenue growth of 4.2% this fiscal year and 6.8% in fiscal 2024.

The firm is also expected to show impressive bottom-line growth, with estimates for earnings of 34 cents per share for fiscal 2023, up 41.7% year-over-year. Analysts are targeting another 29.4% jump in earnings in fiscal 2024, to 44 cents per share. 

This fundamental strength, due in part to solid customer retention and recurring monthly revenue balances, is why ADT is on this list of the best cheap stocks to buy now.

ASE Technology Holding Co.

• Market value: $15.0 billion
• Dividend yield: N/A

Semiconductor stocks took it on the chin a few years back amid supply-chain disruptions. Headwinds remained after a 2022 U.S. Department of Commerce ruling restricted exports to China. However, it's important to understand that those troubles emerged after significant long-term growth for the semiconductor industry.

Consider the popular iShares Semiconductor ETF (SOXX), which holds the biggest names in the sector. While the fund is down about 5% from its 52-week high, it's more than doubled over the last five years – compared to a total return (price + dividends) of roughly 65% of the S&P 500 in the same period.

Taiwan-based ASE Technology Holding Co. (ASX, $6.99) is not a big-name, branded chipmaker like an Intel (INTC) or a Nvidia (NVDA) that might be the first names that spring to mind for investors. But recently, ASE has outperformed its peers, as well as the broader S&P 500, with shares that up more than 9% in the last 12 months. That's because ASE is involved in services like packaging and testing circuits and doesn't design specialty semiconductors on its own the way these bigger names do.

It's a lower-margin business, but that means ASE doesn't have to sweat the research side or the marketing of patented semiconductors and therefore offers more stability. Many of the cheap stocks out there in the tech sector can be risky, so ASE's unique business model makes it stand out.

Equitrans Midstream

• Market value: $2.4 billion
• Dividend yield: 10.7%

Equitrans Midstream (ETRN, $5.59) is an energy infrastructure stock valued at just around $2.4 billion at present. Its natural gas pipeline and storage assets are located mainly in the Appalachian Basin, but it also has a modest water and wastewater utility operation that provides potable water to parts of Ohio.

In mid-May, the U.S. Forest Service (USFS) approved a new permit allowing Equitrans Midstream's Mountain Valley Pipeline (MVP) project to run through 3.5 miles of the Jefferson National Forest in Virginia. UBS Global Research analyst Brian Reynolds views this as a positive ruling, though he adds that hurdles, including the USFS appeals process, remain. Reynolds has a Neutral rating on ETRN, which is the equivalent of a Hold.

While some of the names on this list carry an elevated risk profile, ETRN is one of the most stable and recession-proof stocks you'll find in the lineup. 

LNG infrastructure operations are far more stable than exploring for fossil fuels and dealing with the volatility of market pricing. Instead, ETRN is a toll-taker that just passes the fuel along – and takes a small fee along the way. That allows for a reliable operation that supports a generous and consistent dividend payment to shareholders.

In fact, the dividend is a hefty 10.7% based on its 15 cents per share quarterly payout and current pricing. Even if shares continue to move sideways, that big-time payday could make Equitrans one of the best cheap stocks for income investors to consider.

NL Industries

• Market value: $270.4 million
• Dividend yield: 5.1%

NL Industries (NL, $5.54) has a long and complex history. Formerly known as the National Lead Company, the smelting company was one of the 12 original stocks included in the Dow Jones Industrial Average in the late 1800s. It eventually got into the paint game – with lead paint before the health risks were well known, and then eventually via titanium dioxide pigments that are known for their brilliant white finish on appliances, cars and other goods.

NL is still in the machined metals game, with a subsidiary that manufactures exhaust systems, gauges, throttle controls and other hardware for the marine industry. It also has a security products business that focuses on various locks, cabinets and other products.

NL Industries, tied to cyclical manufacturing trends and with a modest market cap of just $270 million in market value, is certainly one of the riskier bets on this list of cheap stocks. Indeed, shares are down about 22% in the last 12 months, compared with a total return of almost 5% for the S&P 500 in the same period. However, it's up about 120% in the last 36 months, more than doubling the return for the broad market.

Payoneer Global

• Market value: $1.6 billion
• Dividend yield: N/A

Payment and e-commerce platform provider Payoneer Global (PAYO, $4.44) is a small-cap stock in the tech sector valued at about $1.6 billion. It's currently running at breakeven on its bottom line as it invests heavily in growth. However, that's to be expected for a company that didn't exist until 2005 and only became publicly traded in 2021.

Amid the rise of mobile and cashless transactions, PAYO has a great long-term tailwind for its business. The firm is not like consumer-facing brand PayPal Holdings (PYPL), and instead is focused on B2B payment operations. Specifically, Payoneer's technology is built for international payments, managing a digital business, or accessing capital to open up new opportunities. Its cross-border payment solutions support an ecosystem of marketplaces in approximately 190 countries and territories worldwide.

There's assuredly risk here if we hit a widespread downturn in global spending, and thus reduced transaction volume. But PAYO, one of Wall Street's best cheap stocks to buy, could have a very bright future in a digital age. In 2022, it hired former Alibaba.com (BABA) executive John Caplan as its CEO, and it is looking to expand even further in the years ahead.

In February, Payoneer reported strong top-line growth of 32% on a year-over-year basis. And in May, it hit the mark again, generating 40% year-over-year revenue growth. Looking forward, PAYO expects growth to continue in the 30% range, which bodes well for investors in this cheap stock.

Needham analyst Mayank Tandon (Buy) seems to agree. "Given PAYO's large global network and diverse product suite, we believe the company is well-positioned to become the leading cross-border payments platform for commercial and freelance/gig-workers looking for cross-border payment solutions," Tandon writes in a note to clients.

Prospect Capital

• Market value: $2.4 billion
• Dividend yield: 11.8%

Prospect Capital (PSEC, $6.11) regularly pops up on lists of the best cheap stocks for income investors. This company has a reputation for its internal investment prowess – which makes it a natural vehicle for other outside investors looking to share in its success.

PSEC is a business development company. BDCs function more like a private equity firm or hedge fund than your typical financial stock, taking in cash and then redeploying it wherever it thinks it can get the best return. All told, the company commands about $9 billion in assets. That cash is primarily invested in mid-sized corporations with less than $150 million in annual profits. This means they are "goldilocks" operations: not so big they require very deep pockets, but not so small a single executive departure or outside disruption can ruin things.

What's more, PSEC has made a business out of financing troubled companies that may not find it easy to get capital elsewhere. This is a bit of a risky proposition, but can result in windfall profits when things work out. Plus, its portfolio includes includes 130 companies spread across 37 separate industries, including packaged foods, healthcare, software and machinery. This provides investors with deep diversification to help smooth out any bumps in the road.

Shares have more or less tracked the market over the last year or two. But PSEC is a monthly dividend stock that yields 10.3%, which makes the total return of this BDC worth a look.

Sirius XM

• Market value: $13.7 billion
• Dividend yield: 2.6%

When it comes to cheap stocks, satellite radio service provider Sirius XM Holdings (SIRI, $3.54) is an interesting one to consider because of two big advantages it holds over traditional media companies. First, it's a legal monopoly, with no realistic alternatives beyond terrestrial radio or using your cellphone. That means those who have come to rely on SIRI tend to be very sticky customers – as evidenced by the fact the company hiked its subscription costs for in-car services in March.

The second is that Sirius XM's operating model is not ad-driven – which allows it to forgo the army of salespeople used by traditional broadcasters and instead focus on on-air talent. Consider that even after the acquisition of Pandora Media back in 2019, only about 20% of Sirius XM's $9 billion in fiscal 2022 revenue last year came from advertising. That lends reliability to operations, particularly if you think the U.S. economy may be at risk of recession in the coming months.

Last but not least, the communications services stock has a commitment to shareholder value that includes a solid capital-return program. It's doling out a 2.7% regular yield on top of a special 2022 distribution and consistent stock buybacks on top of that.

Organic revenue growth for SIRI has admittedly been slow going, but there's a lot to like about this company thanks to its unique business model and a robust listenership of some 34 million subscribers and counting.