When it comes to stocks, price matters. While most analysts concentrate on valuation, i.e. the price-to-earnings estimates, for retail investors the price at which shares can be purchased is of paramount importance. A lot of investors, for example, can’t afford to buy a single share of Chipotle Mexican Grill (NYSE:CMG) right now with the stock trading at close to $3,000. However, after the company completes a 50-for-1 stock split in June and the price is lowered to less than $60, these investors will be able to snap up shares.
Many investors with little cash on hand rightfully look for stocks that trade for less than $10 a share, enabling them to build a decent position in their portfolio. If a stock that has a low share price also has a compelling valuation and offers a dividend payout, then the stars may have aligned and you could have the makings of a great long-term investment. The key is to do one’s homework and carefully evaluate a stock before buying it. Here are the top three under-$10 stocks to buy in April 2024.
Barclays (BCS)
British bank Barclays (NYSE:BCS) is currently trading near a 52-week high but is still available for purchase at just under $10 per share. BCS stock is currently trading at $9.60 a share. Not only is the low share price attractive, but so too is the valuation and yield. Barclays trades at just seven times future earnings estimates and offers its shareholders a quarterly dividend payment of 10 cents per share, giving BCS stock a strong yield of 4.19%. Barclays’ shares are also on an upswing, having gained 21% so far in 2024.
BCS stock has been trending higher ever since the bank announced in February a strategic overhaul of its operations. The changes include cost cuts, asset sales, and a reorganization of its business divisions. Going forward, the 128-year-old bank will be divided into five operating units, separating the corporate and investment banking sides of the lender. Management said they are targeting cost savings of £2 billion (US$2.5 billion) by 2026.
Barclays also announced an additional share buyback of £1 billion and promised to return £10 billion to shareholders by 2026 through dividends and stock repurchases.
Kinross Gold Corp. (KGC)
Another stock that is moving in the right direction but can still be had for less than 10 bucks is Kinross Gold Corp. (NYSE:KGC). Shares are currently trading at $6.56, but are up 30% in the past 12 months, including a year-to-date gain of 10%. KGC stock has been rising alongside the price of gold, which has hit multiple all-time highs in recent months. Currently trading at $2,335 an ounce, gold’s price was sitting at a record high of $2,431.55 earlier in April.
The strong rise in the price of bullion has lifted the fortunes of gold miners such as Kinross. Expectations are for Kinross and others to make hay while the sun shines and post strong financial results on the back of record prices. Prior to this year, KGC stock had struggled after the company divested a gold mine in Ghana and sold its Russian mining assets following that country’s invasion of Ukraine. However, sentiment towards Kinross has now shifted to the positive.
Beyond the share price appreciation, KGC stock trades at 19 times future earnings estimates and pays a quarterly dividend of 3 cents per share, giving it a yield of 1.83%.
Sirius XM Holdings (SIRI)
Is there a role for satellite radio into today’s world of audio streaming? Warren Buffett seems to think so. The Oracle of Omaha currently owns more than 40 million shares of Sirius XM Holdings (NASDAQ:SIRI), the company that has a virtual monopoly over satellite radio services. Buffett’s stake in Sirius is worth $127.6 million, and despite SIRI stock steadily falling, the world’s greatest investor remains a shareholder. Like Barclays, Sirius XM Holdings is cheap to buy.
SIRI stock currently has a share price of $3.16, a forward P/E ratio of 9.76x, and a dividend yield of 3.36%. For value investors who like to bottom fish, Sirius XM Holdings’ stock is currently near a 52-week low, having fallen 42% this year. The company has struggled with disappointing earnings and concerns have been raised about its growth potential given that most of its customers only listen to the radio network in their car. But some analyst are turning bullish.
Pivotal Research recently upgraded the stock to a “buy” rating from “hold” previously and placed a $4.90 price target on the stock, implying 55% upside from current levels.
On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
