Price doesn't always directly correlate with quality. That's especially true for stocks. Just because a stock has a low share price doesn't mean that it's of low quality.
Actually, the opposite can sometimes be true. There are lots of relatively inexpensive stocks on the market that are high-quality picks for investors. Here are three no-brainer stocks to buy right now for less than $100 each.
1. Bank of America
You can pick up one share of Bank of America (BAC -0.21%) for around $29. I think it would be money well spent, especially if you're investing for the long term.
Bank of America is widely viewed as one of a select few bank stocks that are "too big to fail." That's reassuring considering the challenges the banking industry has experienced this year.
However, Bank of America isn't in any danger of failing. The company reported year-over-year revenue growth of 11% in the second quarter of 2023. Its earnings jumped 19%. BofA's track record for innovation should help it keep the momentum going.
The stock's forward earnings multiple of 8.6x make it a bargain. Bank of America also pays an attractive dividend with a current yield of nearly 3.4%.
2. Enterprise Products Partners L.P.
Enterprise Products Partners L.P. (EPD 0.45%) units are even cheaper than Bank of America's shares with their price below $27. There's also a lot for investors to like about Enterprise.
The company is a leader in the midstream energy industry. It operates over 50,000 miles of pipeline in the U.S. plus other assets including 30 natural gas processing plants.
Enterprise Products Partners' business model enables it to pay steady distributions. The limited partnership has increased its distribution for 25 consecutive years. Its distribution yield tops 7.5%.
The demand for renewable energy sources will almost certainly increase going forward. However, don't write off the prospects for fossil fuels, especially natural gas and natural gas liquids. The U.S. should remain a key supplier of these commodities, which bodes well for Enterprise's growth prospects.
3. Toll Brothers
Toll Brothers (TOL 2.44%) is the most expensive of these three stocks with its share price hovering around $76. Remember, though: That doesn't mean the stock isn't valued attractively.
On the contrary, Toll Brothers sports a very attractive valuation. Its forward earnings multiple stands below 8x despite the stock soaring more than 50% year to date. That's dirt cheap for a company with solid growth prospects.
Toll Brothers ranks as the top builder of luxury homes in the U.S. It operates in 24 states, including multiple fast-growing markets in the southeast and southwest.
CEO Douglas Yearley stated in Toll Brothers' second-quarter conference call in May, "[T]here is a substantial shortage of homes for sale in the US with housing starts failing to keep up with population growth for at least the past 15 years." This creates a significant opportunity for Toll Brothers.
Interestingly, higher interest rates have also worked in the company's favor. Existing homeowners are hesitant to sell their houses and exchange their low-rate mortgages for higher rates. This has reduced the available housing inventory and pushed buyers to build new homes instead. With rates likely to remain high (but not too high) for the foreseeable future, Toll Brothers stock should continue to perform well.
