Though wealthy and successful investors garner much attention on Wall Street, equity markets are accessible to the average person. That's one of the great things about investing in stocks. Even with $30, it's possible to buy stock in top companies that are likely to perform well over the long run -- and we're not talking about fractional shares, either.
Let's consider two stocks that are trading for less than $30 per share but are great picks for long-term investors: Pfizer (PFE -0.42%) and Adyen (ADYE.Y).
1. Pfizer
Pfizer has experienced subpar performances over the past three years, primarily due to unimpressive financial results. The company isn't out of the woods, either. It's facing some important patent cliffs, including one for its anticoagulant Eliquis, which will lose exclusivity in the U.S. by the end of the decade.
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Even with these challenges, the sell-off Pfizer has experienced in recent years may have created a brilliant opportunity to purchase its shares on the dip. The stock's forward price-to-earnings (P/E) was recently 8.3, compared to the healthcare industry's average of 16.2.
Some might argue that Pfizer still isn't attractive because its prospects don't look bright. But partly thanks to its success in the coronavirus space -- and its generating unprecedented revenue for a biopharma company -- it has significantly beefed up its pipeline in recent years.
Pfizer is still at it. It recently licensed a promising investigational cancer drug from China-based 3SBio called SSGJ-707. This medicine is a bispecific antibody, an area of the cancer market that is catching fire, and the pharmaceutical giant wants a piece of it.
Pfizer's oncology pipeline appears particularly robust, but it also boasts promising candidates in other areas. It has more than 100 programs in total, so the company should successfully replenish its portfolio. Meanwhile, Pfizer has successfully reduced its expenses and remains engaged in cost-cutting initiatives that will further boost the bottom line.
There are other reasons to invest in the company, including its dividend. Pfizer's poor performance in recent years has pushed its current yield up to a juicy 7%, and the company has increased its payouts by 62% in the past decade. The stock might not recover overnight, but for about $26 per share, Pfizer is a top pick for long-term, income-oriented investors.
2. Adyen
Adyen is a fintech leader that offers payment processing, payment gateways, and risk management services on a single, integrated platform. It is especially appealing to multinational companies that would otherwise have to deal with different providers for each of those needs in different regions. Adyen's ecosystem significantly simplifies things for its clients.
That's why it has attracted the business of some major corporations, including Spotify Technology, Uber Technologies, and Microsoft.
That's also why Adyen's revenue remains strong. Last year, the Netherlands-based company reported about 2 billion euros in revenue (about $2.3 billion), up 23% year over year, on 1.3 trillion euros ($1.5 trillion) in processed volume, which grew 33% compared to the year-ago period. Net income was 925.2 million euros ($1.1 billion), up 32% compared to 2023.
Adyen has performed extremely well over the past year, thanks to its excellent results. However, its shares are becoming expensive; the forward P/E is around 47.
While that means the stock could be somewhat volatile in the short term, the company's long-term prospects look attractive due to its wide moat and the industry's direction. Adyen benefits from switching costs -- its clients can't easily switch payment providers without risking disruption to their day-to-day activities.
Elsewhere, Adyen -- which has a well-established business in Europe -- has been making a push in regions such as North America. It has only begun to scratch the surface of its opportunities in the U.S., where, as it points out, it only has a single-digit market share. Adyen won over major clients in Europe because of its superior offerings. It should do the same in the U.S., a less mature market for the company, but a significant one since it remains the world's single largest economy in terms of gross domestic product.
So you can expect the stock to continue delivering superior returns over the long term, even if it experiences some short-term volatility. As of this writing, Adyen's shares are trading for a little under $20 apiece.
