Some of the best-performing and most well-known stocks sell for huge nominal sums. This can be discouraging for some investors who are looking to own full shares of businesses, but don't want to put too much capital to work in the stock market.
Luckily, many companies have share prices that are below $20. This ensures that investors can load up on them for their portfolios even if they're only willing to work with small dollar amounts. And that can level the playing field for everyone.
Here are three top stocks you can still buy for under $20 a share.
1. Carnival
Even after skyrocketing 97% in 2023, as of this writing, Carnival's (CCL -0.66%) stock trades at a price of roughly $16. So it should definitely still be on your radar.
The coronavirus pandemic crushed the company, bringing demand to a screeching halt, and highlighting just how precarious a financial situation Carnival was in. But things are taking a turn for the better, as people are ready to travel and explore again.
During its fiscal 2023 first quarter (ended Feb. 28), the business's revenue nearly tripled on a year-over-year basis to $4.4 billion. Bookings during the period were a record for any quarter in company history.
Perhaps even more encouraging for shareholders is Carnival's path to getting back toward profitability. Its operating loss in Q1 2022 was a whopping $1.5 billion. In the latest three-month period, this metric was under $200 million. The company is certainly heading in the right direction. In fact, management thinks that Carnival will produce adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $4 billion (at the midpoint) this fiscal year. That's quite the turnaround from last year.
Despite strong demand, investors should be aware of the effect a recession could have on a discretionary business like Carnival. The company also has $33 billion of long-term debt on its balance sheet. The cheap valuation might make up for these risks.
2. Ford
Shares of Ford (F -1.92%) are 44% off their all-time high from early 2022. This is largely due to macro headwinds that rattled the industry throughout 2022. Ford battled supply chain issues, rising costs, and rapidly rising interest rates that hurt the company.
However, there are reasons for investors to be optimistic about this top auto stock's prospects. Revenue of $41.5 billion during the first three months of 2023 showed a year-over-year increase of 20%. Adjusted earnings per share of $0.63 were up 66%. Both of these key figures beat Wall Street estimates.
As the industry shifts to electrification, Ford is properly positioned. The popular F-150 Lightning pick-up truck and the Mach-E SUV are clear indicators that the business will be a force to be reckoned with in the electric vehicle (EV) market. An announced partnership with Tesla will give Ford EV customers access to the company's charging network, which could help boost adoption.
Although Ford continues racking up losses in this segment, management has high hopes. They are aiming for 2 million EV units sold on an annualized basis by the end of 2026, compared to just 62,000 in 2022. Once these sales ramp up, and the business can benefit from operating leverage, profitability should hopefully follow. And that can be a boon for the stock, now at $14 a share.
3. SoFi Technologies
Popular fintech stock SoFi Technologies (SOFI 3.69%) rounds out this list. Its shares have been on a tear this year, up roughly 90%, and they can actually be purchased for under $10 right now.
The news that the pause on payments of government-backed student loans is coming to an end certainly caused the stock to pop more recently. As of March 31, about one-third of SoFi's loan book consisted of student loans. And making it easier for students to pay for school was the goal that helped start the company in the first place. But now that borrowers will have to start making payments on their loans, SoFi could be poised to benefit from heightened refinance activity, which it specializes in.
The regional banking crisis appears to have been a net positive for SoFi. Its deposits increased by 38% during the three-month period between Dec. 31 and March 31. This provides a stable and low-cost source of funding that the business can use to fund its loans. This is especially important as interest rates have gone up.
SoFi's current price-to-sales ratio of 4.6 is slightly more expensive than its average historical valuation. But a recent analyst upgrade to the stock's price target might give investors all the confidence they need to add this digital bank to their portfolios.
