Good investment opportunities don't always mean big stock prices. Investors looking for a share price that's a little more "bite size" shouldn't fear to tread below the $20 (or even $10) stock price level. Pandora Media Inc. (P), VEREIT Inc. (VER), and TPG Specialty Lending Inc. (TSLX -0.14%) are all low-priced stocks worth a look. And two offer hefty dividends, as well, if that type of thing interests you. Here's a quick primer on each of these stocks trading under $20.

Listen up

Demitri Kalogeropoulos (Pandora Media Inc.): The stock has more than doubled so far this year, but Pandora is still priced well below $20 per share. There are some important investor concerns about this business, including the fact that listener hours are declining while the company generates persistent net losses.

Two people looking at a graph on a computer screen.

Image source: Getty Images.

Yet the music-streaming service is finding creative ways to grow its revenue that don't just depend on serving up an ever-increasing volume of ads to listeners. New premium service offerings are gaining traction, for example, even if the vast majority of its user base chooses to stick to free listening modes.

Pandora's collection of 71 million active users might be an attractive target for a rival to attempt to scoop up with an acquisition, but investors shouldn't count on a buyout as their main bullish thesis. Instead, keep an eye on how well management succeeds at building up the value of its offerings, both to users and to advertisers, in the quarters to come. The economics around streaming music are tough, but Pandora brings some important assets to that fight, including a strong brand and a big base of engaged users.

Big yield, overblown risks

Reuben Gregg Brewer (VEREIT Inc.): VEREIT has a decidedly ugly history. It was born out of the accounting scandal that led to a dividend elimination at American Realty Capital Properties -- a once fast-growing real estate investment trust, or REIT, that stumbled on its own rapid growth. That period also led to the departure of the CEO and other leaders, and a raft of lawsuits.

New CEO Glenn Rufrano has done a great job of outlining how the REIT would get its business back on track, including selling undesirable assets, solidifying the balance sheet, and creating a more balanced portfolio. He also changed the name, to put some distance between what happened in the past and the company he was looking to build. Rufrano and his team have delivered well on all accounts, allowing VEREIT to reinstate the dividend, at a lower level, just nine months after it was eliminated.   

VER Chart

VER data by YCharts.

The problem, at this point, isn't the business. It is the uncertainty surrounding the still-lingering lawsuits. That's kept the shares at depressed levels since the scandal hit, with valuations below similarly large and diversified peers -- and a stock price below $10. The yield, however, is an enticing 7% with strong distribution coverage. (The FFO payout ratio was just 76% in the second quarter.)    

Legal fees will be high until VEREIT gets out from under all the lawsuits. And it could face additional costs if it loses cases or chooses to settle them (which it recently did with one key suit involving Vanguard). There are risks here, to be sure, but so far the REIT has been muddling through pretty well. This suggests the worst-case scenario is that investors get to collect a well-covered 7% yield for a few years while waiting for VEREIT to finally put the accounting issue behind it. That's not a bad outcome at all.   

A fountain of dividends

Jordan Wathen (TPG Specialty Lending Inc.): This business development company (BDC) makes its money in private credit, lending to businesses that are either too small or too speculative to get financed by banks or Wall Street.

Where there's trouble, you're likely to find TPG Specialty Lending. The company has carved out a niche as a high-yield lender to distressed retailers, earning double-digit returns for its shareholders, even when the end result is a bankruptcy or liquidation.

It recently played a prominent role in financing iHeartMedia, a media company that is currently in Chapter 11. That credit, like many that have gone "bad," will work out just fine for TPG Specialty Lending and its shareholders, as it should recover virtually all of the principal, interest, and fees it is due.

This is a business where expertise matters. Over its short life as a public company, TPG Specialty Lending has proven its ability to navigate messy situations where it can earn outsize returns one headache at a time. They do the heavy lifting; shareholders enjoy the spoils.

With the stock trading at roughly $20 per share, TPG Specialty Lending trades for about 10 times "steady-state" earnings power. Because it is structured as a BDC, it pays out virtually all of its earnings to shareholders in the form of a dividend, resulting in a yield that approximates 10% when its special payouts are added to its regular quarterly dividends.

Diamonds in the rough?

Pandora, VEREIT, and TPG Specialty Lending are all trading below $20 a share for a reason. So these aren't slam-dunk investments -- you need to do some homework to make sure you fully understand what you are buying, the risks, and the opportunities. But each one of these low-priced stocks has an interesting story to tell. If you are willing to do a little digging, you might find that one or more is a good fit for your portfolio today.