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Best Stocks Under 50 Dollars in 2019

Not that long ago, it was rare to see a stock price climb above $100. Back then, stocks were traded in round lots of 100 shares. An investor needed at least $10,000 to buy a stock trading for more than $100.

That was a lot of money to sink into a single company, which made portfolio diversification difficult to achieve.

These days, investors can buy any number of shares of stock at a very low cost. A high share price is no longer an impediment to owning a stock.

For that reason, it is now common to see stocks trading well above $100 per share. In fact, roughly 40% of the stocks in the S&P 500 Index are currently trading for at least $100. Several are priced over $1,000. However, only a quarter of them can be bought for less than $50, some of which offer outstanding value to bargain-minded investors on a budget.

The Best Stocks Under 50 Dollars in 2019

If you’re in a hurry, below are our top picks for best stocks under 50 dollars in 2019:

  1. Johnson Controls – Flush with cash to buy back stock and invest for growth.
  2. Harley-Davidson – New line of electric bikes should boost sales in 2019.
  3. H&R Block – Shift towards online business will expand profit margins.

What Are The Best Stocks Under 50 Dollars in 2019?

The mainstream media fawns over expensive stocks like Amazon.com (NSDQ: AMZN) and Alphabet (NSDQ: GOOGL), both of which were recently trading well in excess of $1,000 per share. But share price alone tells you very little about a company’s true worth.

Instead of focusing on share price, a better way to evaluate a company’s value is to examine its performance on a per share basis. For example, Amazon earned nearly $6 per share during the quarter ending September 30, 2018. However, at a then share price of $2,000 that worked out to a PER (price to earnings ratio) of more than 80 times earnings on an annual basis.

That’s a lot to pay for a stock.

But what if I told you that there are some stocks priced at less than $50 that are valued at less than 10 times forward earnings? That’s a lot less to pay for your portion of a company’s profits.

Of course, just because a stock is cheap doesn’t mean it’s a good investment. You need to know what to look for and what to avoid when evaluating the best stocks under 50 dollars in 2019.

The best stocks under 50 dollars in 2019 are those that possess the following traits:

  • Consistently deliver increasing profits without resorting to accounting gimmicks;
  • Improve sales revenue without narrowing their profit margins; and
  • Trade at reasonable multiples to earnings and sales

How Do You Determine What Qualifies as The Best Stocks Under 50 Dollars in 2019?

The three traits listed above can be easily measured to come up with a short list of stocks under $50 dollars to consider. However, there are other aspects of a company’s business that must also be evaluated to narrow down the list.

For example, does the company rely too much on one customer for most of its revenue? Does it engage in a business that is subject to regulation that may change suddenly? Is its leading product at risk of losing market share to a bigger competitor?

It also helps to see who owns the majority of a company’s stock. Having a long list of pension fund investors as shareholders that tend to own stocks for many years, instead of weeks or months, is a plus. You can track which stocks these “smart money” investors favor to see which ones are likely to outperform in the years to come.

Below is a list of three companies that we believe will be among the best stocks under 50 dollars in 2019.

Johnson Controls (NYSE: JCI)

What is it?

Johnson Controls makes heating and air systems for homes, offices, and industrial uses. It’s not a sexy business, but it’s very profitable. The company generates over $2 billion annually in cash flow, with an operating margin in excess of 10%.

Johnson Controls is based in Ireland. Since the Brexit vote two years ago, its share price has dropped steadily due to concerns over Europe’s moribund economy. As a result, the company has sold off assets recently to pare down its operations and focus on profitability.

Why is it one of the Best Stocks Under 50 Dollars in 2019?

The best time to buy a stock is after it has bottomed out and is beginning to recover. Now priced at only 10 times forward earnings, JCI is trading at a big discount to the overall stock market.

The recent sale of its Power Solutions business should improve profit margins going forward. That deal will bring in $13 billion of cash that the company can use to reduce debt, invest in future growth, and buy back its own stock.

In addition, Johnson Controls pays a dividend yield of roughly 3%. With interest rates on the rise, investors will be bailing out of bonds and buying stocks with rising dividend streams.

Harley-Davison (NYSE: HOG)

What is it?

Harley-Davidson is a motorcycle maker based in Milwaukee, Wisconsin. Its iconic bikes are synonymous with freedom, rebellion, and the open road. The company sells its products through more than 1,400 dealers in almost 100 countries.

During the past year, HOG became embroiled in trade war threats between the U.S. and its major trading partners. The company was singled out in a statement by the European Union as an example of retaliatory tariffs that would be imposed if the U.S. did not back down and its share price suffered as a result.

Why is it one of the Best Stocks Under 50 Dollars in 2019?

According to Bloomberg, the much hyped trade war with Europe is not having much of an impact on Harley’s sales there. Currently priced at only 10 times forward earnings, HOG could surprise the market with better than expected results this year.

Also, the company recently unveiled a line of electric bikes to appeal to a new generation of younger riders. These consumers are motivated by the lower ownership costs and reduced environmental impact of these vehicles. If the initial response is positive, Harley-Davidson may have to revise its sales estimates for 2019 upward.

Here is a video of Jay Leno’s take on this bike:

H&R Block (NYSE: HRB)

What is it?

H&R Block helps taxpayers file income tax returns. In 2018, the company filed more than 23 million tax returns and earned over $3 billion in revenue. It offers online tax preparation for the DIY (do it yourself) market, and walk-in offices for taxpayers that would prefer to meet with a professional to do their taxes for them.

According to a recent company presentation, tax preparation assistance accounts for 56% of all tax filers and 87% of all income tax revenue. The tax assistance market is estimated at $21 billion of annual revenue, with H&R Block projected to collect roughly $3 billion of that amount in 2019.

Why is it one of the Best Stocks Under 50 Dollars in 2019?

H&R Block is a cash flow machine. Its 18% profit margin ensures there will be plenty of money to pay its 3.5% dividend yield while investing for future growth. In addition, over the past three years it has repurchased 25% of its outstanding shares.

H&R Block is a conservative play on the recent shift in market sentiment away from momentum stocks. In addition, its earnings stream is mostly impervious to the threat of trade wars and should be enhanced by the recent decline in unemployment in the U.S. to historically low levels.

Looking for investment opportunities that aren’t vulnerable to trade wars or economic ups and downs? Turn to my colleague Jim Fink, chief investment strategist of Velocity Trader.

Jim is lifting the curtain on his breakthrough system, the Velocity Profit Multiplier. Jim’s system has a proven track record of turning stock moves as small as 1% into triple-digit gains.

But availability is limited; we’ve only opened a limited number of spots to Jim’s program. Click here for a free presentation.

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