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When people think of cheaper stocks, they tend to think of penny stocks; however, penny stocks are not the only affordable ones. There are also stocks that are $20 and less. Let’s take a look at some of these stocks and their statistics.
Types of Affordable Stocks
Before you start your affordable investment journey, it’s important to know that there are different types of affordable out there. You don’t just have to go with the traditional stocks with stock market investing. Let’s take a look.
Index Funds
One of the most popular types of stock market investments is index funds. You may know them at mutual funds and exchange-traded funds, or ETFs, as well as a variety of other investment vehicles. These types of investments are often used for RRSPs and other retirement accounts, but they can also be used as general investments.
The idea behind index funds is to replicate the performance of specific markets such as the TSX and Nasdaq. They passively track the performance by holding the same stock that the index does. This makes them easier to manage than actively managed funds, and it also makes them cheaper.
One of the reasons that index funds are so popular, especially with those who are new to investing or have little money, is you can put a little money into a lot of stocks. This allows for instant diversification and to control how much risk you’d like to take. It also gives you exposure to the overall market in respective industries. On top of that, you can build long-term growth without compromising your current financial position. Instead of buying stocks separately, index funds can give you more consistent cash flows and more structured investment returns.
Blue Chip Stocks
If you want to invest money directly into the stock market without spending too much, a good option is a blue chip stock. Blue chip stocks are stable, reliable, and perform well on the market. The reduced risk as well as the lower cost makes them a good investment for those just starting out.
The great thing about blue chip stocks is that they’re well-known companies that you’ve probably heard of. They’re all financially sound and have a history of performing well on the market. They have large market capitalization and consistent returns over time.
One of the biggest reasons that these types of stocks are popular is because they need little research and provide less risk. This is because the notoriety of these companies shields them from as many market fluctuations as smaller companies might have. They also provide dividends, which provides consistent passive income. It might not be as large as a smaller company, but the income is consistent, which can provide more wealth over time.
Dividend Stocks
On the stock market, many companies provide dividends to their shareholders. Dividend payments are provided either monthly or quarterly, depending on the company. Due to the fact that you don’t have to sell these stocks in order to start turning a profit (capital appreciation), it’s a great start for those looking to build their wealth over time.
Not only do dividend-paying companies provide a supplemental source of income, but dividend stocks offer less volatility than stocks that don’t pay dividends. This is because companies that provide dividends are often more financially stable and have strong cash flows. You can also invest your dividend earnings and earn more by selling your stock.
Fractional Shares
Another way to get started in the stock market with limited funds is with fractional shares. Fractional shares allow you to purchase partial shares. This allows you to get the benefits of purchasing expensive shares without having to purchase stocks as a whole. They also let you customize your portfolio to match your investment goals.
Affordable Stocks to Choose From
When it comes to stocks, there are plenty of affordable options out there to help with your investment strategy. That said, the price of the stock isn’t the only thing that you need to consider. It’s also important to consider other factors of the stock, such as risk factors and the likelihood of a return.
Eldorado Gold Corp (ELD)
Eldorado Gold Corp is a Canadian company that operates gold mines in Canada as well as Turkey and Greece. It was founded in 1991 and has over 4,800 employees. Its yearly revenue is said to be around 618 Million per year.
Since Eldorado is a gold company, many beginner investors choose them as a way of investing in gold through the stock market. Since they’re relatively affordable, it also makes them a great choice. Here is what their stock looks like.
| Stock Price | $22.08 |
| Market Cap | 4.51 B |
| Average Volume | 477.84K |
| P/E Ratio | 10.37 |
| Dividend Yield | — |
Bombardier Inc (BBD-B.TO)
Bombardier Inc. is a Canadian aircraft manufacturing company. That said, they’re also known for manufacturing snowmobiles. In fact, the company was founded in 1942 by Joseph-Armand Bombardier in order to market snowmobiles. After that, they transitioned into building aircraft. Now, the company is headquartered in Montreal and operates all over the world.
| Stock Price | $81.03 |
| Market Cap | 7.974 B |
| Average Volume | 615.222 |
| P/E Ratio | 16.57 |
| Dividend Yield | — |
Cenovus Energy Inc (CVE)
Cenovus Energy is a natural gas and oil company that is based out of Calgary, Alberta. While this company came to be in 2009, it was formed from the split of another company and can be traced to being around since the 1880s. They’re currently the second-largest Canadian oil and natural gas company as well as the second-largest Canadian-based refiner and upgrader.
| Stock Price | $19.38 |
| Market Cap | 35.37 B |
| Average Volume | 6.56M |
| P/E Ratio | 11.61 |
| Dividend Yield | 3.72% |
Cameco Corp (CCO)
Cameco Corp is one fo the largest producers worldwide of uranium fuel. Their head office is located in Saskatchewan, specifically Saskatoon; they’re one of the largest employers of Indigenous people in Canada. Their land holdings currently consist of 1.8 million acres.
| Stock Price | $60.69 |
| Market Cap | 26.42 B |
| Average Volume | 1.35M |
| P/E Ratio | 154.64 |
| Dividend Yield | 0.26% |
Veren (VRN)
Veren is another oil and gas company based out of Calgary, Alberta. While they’re also headquartered in Calgary, they primarily focus on light oil production in central Alberta as well as southern Saskatchewan.
| Stock Price | $8.54 |
| Market Cap | 5.37 B |
| Average Volume | 6.02M |
| P/E Ratio | 19.12 |
| Dividend Yield | 5.25% |
Blackberry LTD (BB)
Blackberry is a Canadian software company that is best known for its manufacturing of cell phones. Now, this company that has been around since 1984, has transitioned into secure communications and Internet of Things. The fact that this company has been around for so long and has been able to pivot is a great investment for all stock investors.
| Stock Price | $6.16 |
| Market Cap | 3.85 B |
| Average Volume | 3.37M |
| P/E Ratio | - |
| Dividend Yield | - |
CI Financial Group (CIX)
Based out of Toronto, Ontario, CI Financial Group manages investments. They’ve been offering global wealth management and asset management since 1965. They’ve adapted their approaches throughout the times to create the best approach to investments for their clients. The fact that they’re one of the more well-established companies makes them a good option for stock trading.
| Stock Price | $31.25 |
| Market Cap | 4.49 B |
| Average Volume | 637.32K |
| P/E Ratio | – |
| Dividend Yield | 2.57% |
BRP Inc (DOO)
BRP, better known as Bombardier Recreational Products, is a Canadian manufacturer of snowmobiles, ATVs, and other recreational equipment. They’re a subsidiary of the Bombardier company that was founded in 1942.
| Stock Price | $55.17 |
| Market Cap | 4.04 B |
| Average Volume | 181.39K |
| P/E Ratio | 22.94 |
| Dividend Yield | 1.52% |
Iamgold Corp (IMG)
Iamgold Corp is another gold company that’s headquartered in Toronto, Ontario. They own and operate gold mines in Canada as well as Burkina Fusa. They’ve been incorporated since 1990 and have a long history of goos returns and stability on the stock market.
| Stock Price | $8.36 |
| Market Cap | 4.86 B |
| Average Volume | 2.08M |
| P/E Ratio | 3.90 |
| Dividend Yield | - |
Power Corporation of Canada (POW)
Power Corporation of Canada is headquartered in Montreal, Canada. They were founded in 1925 and are a prominent management and holding company that focuses on financial services in North America, Europe, and Asia. They hold a variety of investments, including insurance, retirement and a wide variety of others.
| Stock Price | $48,19 |
| Market Cap | 28.86 B |
| Average Volume | 2.02M |
| P/E Ratio | 14.43 |
| Dividend Yield | 4.60% |
Best Stocks Under $10 and Penny Stocks
While we’ve already seen some great stocks for a great price, here are a few more that are a great choice for under $10.
Pulse Seismic (PSD)
Pulse Seismic is a market leader in energy data. They’re known for delivering the largest 2D and 3D data library in the Western Canadian Energy Sector. They’re also expanding into different forms of energy, including geothermal, lithium, carbon capture utilization as well as sequestration and helium extraction.
| Stock Price | $2.40 |
| Market Cap | 122.52 M |
| Average Volume | 15.04K |
| P/E Ratio | 36.57 |
| Dividend Yield | 2.49% |
Silvercorp Metals
Silvercorp Metals is a mining company that is based in Vancouver, Canada. They focus on the acquisition, exploration and development of properties that contain silver. They’re actually considered to be China’s largest silver producer.
Like many of the other companies that we’ve discussed, this company was founded in 1991. They’ve been around long enough to keep a consistent profit and provide a stable investment for experienced as well as new investors.
| Stock Price | $5.88 |
| Market Cap | 1.29 B |
| Average Volume | 595.51K |
| P/E Ratio | 11.41 |
| Dividend Yield | 0.60% |
Mandalay Resources
Mandalay Resources was founded in 1997. They’re headquartered in Toronto, Ontario. However, just because they’re Canadian-based doesn’t mean that they’re operating in Canada. They produce gold in both Australia and Sweden. They’re goal is to reduce their costs to increase cash flow.
| Stock Price | $4.91 |
| Market Cap | 459.39M |
| Average Volume | 111.84K |
| P/E Ratio | 6.84 |
| Dividend Yield | - |
FinDev (FDI.V)
FinDev is a capital market company that was founded in 2018 and is also considered to be a crown corporation. They’re Canada’s Development Financial Institution, which supports the private sector in promoting sustainable development. They’re also a fully owned subsidiary of Export Development Canada.
| Stock Price | $0.50 |
| Market Cap | 14.324 M |
| Average Volume | 6,518 |
| P/E Ratio | 6.25 |
| Dividend Yield | $0.03 |
PertroTal (TAL)
PetroTal is domiciled in Calgary, Alberta, but it is headquartered out of Houston, Texas. They were founded in 1979 and have a long history of good returns. Like many other oil producers, they’re also committed to providing and maintaining a sustainable future.
| Stock Price | $0.66 |
| Market Cap | 604.85 M |
| Average Volume | 589.55K |
| P/E Ratio | 3.83 |
| Dividend Yield | 13.15% |
How To Start Affordably Investing
When it comes to investing in Canada, the simplest way is to start using an online brokerage account. Many online brokerages offer the tools, up-to-date market news and education you need to make informed investment decisions using your online investment account. They also have very affordable rates and have low management fees. That said, there are plenty of different online brokerages to choose from based on the types of investments that you’re looking for.
If you don’t want to go with an online brokerage, you can also choose to use an investment broker. However, investment brokers are more expensive than online brokerages. This is because physical brokerages more actively manage your accounts, which have higher management fees. However, they also come with professional advice that can help reduce your overall investment risk.
Safe Stocks for Beginners
In general, all stocks have a risk tolerance. That said, going with well-known stocks that have a reputable history and good profit margins is a safer bet. You also want to go with a stock that pays dividends. Companies that pay dividends are usually more financially stable as well. For those who are new to investing, this is much less risky.
When it comes to choosing a safe stock, cheaper isn’t always the best. However, a lot of cheap stocks are safe. In order to make a good choice, though, it’s important to do your research. Looking into a few years' worth of history, market trends, and the specifics of the stock can usually tell you enough to help you make a decision.
Purchasing Stocks in Canada Without a Broker
Purchasing stocks without a broker is also known as self-directed investing. Online brokerages in Canada offer this approach to investing. Before you begin, though, it’s important you choose an online brokerage that offers the types of stock you’re interested in investing in. They also offer a variety of investment accounts to fit your needs. You can even link your bank account to make your investing simpler.
Depending on which brokerage you use, the fees are going to vary. The information and investment advice available to you to help you on your investment journey will vary as well. The great thing about online brokerages, though, is that you don’t just have to stick to one. You can use them to gather a variety of different investments to help diversify your portfolio. This is something else that also helps to reduce your overall risk when you’re investing.
A great way to prepare for your investment journey is with a paper trading account. These accounts allow you to invest in stocks using fake money in order to practice before you dive into the real thing. It’s a great way for novice investors to get comfortable before they start investing for real.
The Importance of Diversification
No matter what type of investing you prefer, broad market exposure and diversification are the keys to mitigating your risk. Not only should you diversify your portfolio with different investment types, but you should also vary the different sectors that you choose to invest in. Even if you choose to use financial advisors, this is the strategy that they will use.
Even if you’re just intending to focus on stock investing, there are some great ways to diversify. You can go with index funds as well as individual stocks, there are growth stocks, large cap stocks, small cap stocks, meme stocks as well as many other types.
Principles of Investing
Many new investors choose to work with a certified financial advisor, but one of the most important things that you can learn to reach your investment goals is investing principles. These are:
- Invest early
- Invest regularly
- Invest enough
- Have a plan
- Diversity
Not only do these principles help with risk management in the event of an economic downturn, they also make it so you can take a little more risk with your portfolio. If you want to invest in different asset classes and smaller companies, following these principles can help reduce your risk of loss. That said, these key factors aren’t foolproof. You still need to follow financial news, look for strong balance sheets, and invest in a broad range of stocks to help you earn passive income and reach your financial goals.
Final Thoughts
Starting your investment journey in Canada can feel very overwhelming. There are so many different types of investments that you can choose from, and they can vary greatly in price. That said, one of the most common ways that people choose to start their investment journey is with stocks. Choosing the right stock can take some research, though.
When you start investing in stocks, you can purchase the stock directly, or you can choose to invest in index funds. Index funds offer a way for you to track a specific market index as well as its shares. It’s an affordable way to have a diversified portfolio without investing in multiple stocks. They’re also much less risky than traditional stocks. However, there are also single stocks that are more well-known and also considered to be a smart investment.
Before you begin your investing journey, one of the best things you can do is research. Decide which type of investing works best for you and which types of investments align themselves best with your financial goals. Due to the fact that there are so many great choices out there, you can usually find a good one to help you get started.
