One of the best things about stock investing is that you don't need a lot of money to begin doing it. Once you've handled other financial priorities like building up a sufficient emergency fund and paying down your high-interest debt, you can begin with as little as $1 on most brokerage platforms. Here are three stocks (all currently trading for less than $40 per share) that I'd split up a $1,000 investment between now.
1. SoFi Technologies
SoFi Technologies (SOFI 3.69%) is a fintech company aiming to become the go-to platform for all financial services. From student loans to mortgages to personal loans to refinancing, it's out to do it all. Since mid-May, SoFi's stock price has more than doubled, mainly due to the resolution of the debt ceiling issue, which ended the student-loan repayment moratorium adopted during the pandemic.
SoFi has faced some troubles since the start of the COVID-19 pandemic in 2020, especially regarding student loans (the company's original business). In 2022, SoFi originated $2.2 billion in student loans, down by about $4.5 billion from its volume in 2019. However, the company increased its personal loan origination from $3.7 billion to $9.7 billion over that span.
That increase in personal loans, which typically have higher interest rates than student loans, was timely for SoFi as the Federal Reserve raised benchmark interest rates over the past year. SoFi's Q1 2023 interest income from loans was about $357 million -- up from $114 million in Q1 2022.
The stock, like many fintechs, took a beating in recent years and has fallen more than 50% since mid-2021. But the stock has taken off this year, with a 75% gain. Even so, over the long term there is room for more gains because SoFi should play a sizable role in the young and growing fintech market.
According to a study by Boston Consulting Group, global fintech revenue is projected to grow from $245 billion in 2021 to $1.5 trillion by 2030, and the U.S. is projected to account for 32% of it.
2. AT&T
It has been a wild ride for the telecom industry recently, especially for AT&T (T 1.02%), which was down more than 15% year to date. Telecom stocks are down across the board, but AT&T has been leading the charge in the wrong direction.
Data source: YCharts.
But after its admitted failures in the media and entertainment markets, AT&T has begun to refocus on its core telecom business and on paying down the heavy debts it took on to enter the media industry. Although those efforts haven't necessarily been reflected yet in its stock price, they have seemed to help its customer growth.
AT&T added 424,000 net postpaid phone subscribers in Q1 2023. Although that was less than the 691,000 it added in Q1 2022, it was considerably more than the 127,000 postpaid phone net loss Verizon (VZ 1.17%) experienced over the same period.
It also helps that AT&T is operating in an industry that has transitioned from a consumer discretionary (a "want") to a consumer staple (a "need"). Smartphones, the internet, and satellites have become indispensable parts of life in America, and AT&T plays a vital role in providing these services.
Things may look shaky in the short term as the company addresses its debt problems, but a healthy dividend (which at the current share price yields over 7%) should help investors remain patient in the meantime.
3. Enbridge
Canadian oil pipeline and energy company Enbridge (ENB -1.21%) may not get much media attention, but it has a strong balance sheet that investors looking for stability appreciate.
In its Q1 2023, Enbridge earned CA$1.7 billion ($1.29 billion) and reaffirmed its adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) forecast range of $15.99 billion to $16.5 billion for the year. Considering the company has met its projections for 17 straight years, I'm inclined to believe that it will do so again.
It has a $17 billion project backlog, which should help it pad its top line over the next few years. Couple that with the fact that it has done a great job of expanding by taking advantage of acquisitions at favorable values -- including energy storage companies Aitken Creek and Tres Palacios -- and the future is looking solid for Enbridge and its investors.
Enbridge also pays a dividend that at current prices yields around 7%, and has increased its distributions for 28 straight years. It has been a reliable income generator for investors, and given its prospects, that shouldn't be changing anytime soon.
