Many stocks will set you back hundreds, if not thousands of dollars. As such, in order to invest in expensive stocks on a budget, you will only be able to buy a small fraction of a share.
With this in mind, this guide will divulge the best stocks under $5 to buy in 2023.
Best Stocks Under $5 to Buy in 2023
Below you will see a list of the best cheap stocks to buy under $5.
As you can see, the top 10 stocks under $5 are varied and cover numerous sectors and industries. You’ll find further information on each of the above-listed stocks next.
Your capital is at risk. 68% of retail investor accounts lose money when trading CFDs with this provider.
A Closer Look at the Top Stocks Under $5 to Invest in
Prior to investing in stocks under $5, make sure you carry out thorough research.
To save you some time, we are going to take a closer look at each company from our list of the best stocks under $5.
1. Lucky Block – Overall Best Stock to Buy Under $5
Our number one pick when it comes to stocks priced under $5 is Lucky Block. The first thing you’ll notice is that Lucky Block isn’t actually a stock – it’s a cryptocurrency. However, this deviation from being an equity adds several significant benefits; most notably, it provides a great deal of diversification if you add Lucky Block to your equity portfolio.
Diving into the specifics, Lucky Block is a crypto-gaming platform that has grown exponentially in recent months. The platform intends to provide regular lottery draws hosted on the Binance Smart Chain (BSC), which will allow Lucky Block to be fairer and more transparent than many legacy lotto providers. In addition to this, since these draws are blockchain-based, anyone in the world can enter – boosting potential jackpots.
As noted in Lucky Block’s whitepaper, the platform is made functional through LBLOCK – Lucky Block’s native token. LBLOCK is a BEP-20 token used to purchase lotto tickets through Lucky Block’s platform, with jackpots also being distributed in LBLOCK. Lucky Block also recently launched LBLOCK V2, which is an ERC-20 token and can be traded on various centralized exchanges (CEXs).
Currently priced at $0.001970, LBLOCK is undoubtedly one of the best stocks under $5 which could explode soon. The token has already displayed quadruple-digit gains earlier in the year, although is now trading significantly lower than all-time highs highs. However, this provides an exciting opportunity to buy Lucky Block at a discount before the next bull run takes place.
Cryptoassets are a highly volatile unregulated investment product.
2. Gevo – Best Energy Stock to Buy Under $5
Gevo was founded in 2005 and is a green energy-focused company that is seeking to phase out the use of non-renewable oil and gas products. The company does this by employing a variety of chemical methods to produce the same essential molecules, whilst only using exclusively renewable resources.
Biofuels are made from agricultural products, most commonly maize, and the firm offers fully integrated solutions for decreasing emissions in the industry. Gevo has received awards and milestone payments to fund development because of its efforts, and it has targeted 2022 as its initial timeframe for contract fulfillment.
This company is yet to make any noticeable revenue. However, in late 2021, Gevo secured an 8-year arrangement with Kolmar Americas. This is a Swiss renewable fuels firm. Gevo will deliver 45 million gallons of renewable hydrocarbons per year, including sustainable aviation fuel.
The business estimates that the agreement will bring in approximately $300 million in yearly income, or over $350 million when byproducts from its operations, such as corn oil and protein, are factored in. The Kolmar acquisition could potentially produce $2.8 billion in income for Gevo over the next eight years.
Gevo is one of the most active stocks under $5, with an average daily trading volume of $9 million at the time of writing. Gevo hit the NASDAQ in February 2011 at $15 per share. Gevo began 2021 at around $4, before increasing to almost $15 in February 2021. By 2022, this was one of the best penny stocks, trading at less than $5 per share.
In March 2022, Gevo signed an agreement with Delta Airlines to supply 75 million gallons of green aviation fuel. Crucially, sustainable aviation fuel is likely to take over traditional energy. It’s important to bear in mind this is a pre-revenue company. As such, if you believe in the future of Gevo, you might look at this as an opportunity to buy clean energy stocks under $5.
Your capital is at risk. 68% of retail investor accounts lose money when trading CFDs with this provider.
3. Bionano Genomics – High Flying Growth Stock Under $5
Bionano Genomics is a company that specializes in optical genome mapping technology that is used in medical research. The company offers a platform for analyzing the structural variations of large segments of genomic DNA and other biomolecules.
Products include nanochannel chips, automated imaging devices, application-specific reagents, and integrated secondary and primary software. Saphyr – genome-mapping equipment made by Bionano Genomics, is applicable to a wide range of clinical and academic applications, from the detection of genetic abnormalities and cancer research to crop engineering.
Any clinic or laboratory that has Saphyr will need to buy microfluidic sample chips and preparation kits on a regular basis. Furthermore, utilizing the device more regularly will necessitate even more purchases. As such, Bionano Genomics is well on its way to having its own ecosystem.
Saphyr could be Bionano Genomics’ ticket to accumulating a sizable recurring income stream over time, which makes it one of our strong buy stocks under $5. When it comes to income, this business is booming, even if it isn’t yet profitable.
Its yearly income has increased by over 77% in the last three years, with sales of approximately $18 million in 2021, up over 110% from 2020. Bionano Genomics also sold 96% more chips in 2021 than it did in 2020. Bionano Genomics became publically listed on the NASDAQ in August 2018 at a little over $6.
By April 2020, the stock had fallen to an all-time low of $0.28. Bionano Genomics’ all-time high was $14 in February 2021 and since then it has been on a downtrend. That said, many market analysts think that this is one of the best stocks under $5 for future growth potential.
Your capital is at risk. 68% of retail investor accounts lose money when trading CFDs with this provider.
4. Lloyds – Buy Shares in UK-Based Financial Services Provider
Lloyds is a financial institution based in the UK. The group offers multiple services ranging from insurance, mortgages, and vehicle finance to credit cards, loans and savings accounts. Lloyds also owns Scottish Widows, Halifax, the Bank of Scotland, and a number of insurance companies.
For a bank with an asset base of almost £885 billion pounds (Approx $1.1 trillion), Lloyds is perhaps about as straightforward as it gets. Lloyds has a very appealing core deposit franchise. The group is the leading deposit taker in a crowded sector in the UK.
In addition, retail mortgages account for nearly two-thirds of the £450 billion (approx $585 billion) in loans to customers. This company is listed on the LSE, but you can also buy shares on the NASDAQ. The all-time high of Lloyds’ NASDAQ-listed stock was over $47 in May 2002. It was another five years until shares reached anywhere near that before falling again.
Since 2010, Lloyds has traded below $6 per share which has been a disappointing run for shareholders. Moreover, at the start of 2020, COVID-19 caused Lloyds stock to go from just over $3 to around $1 in just a few months.
Lloyds has since recovered by around 130%. Some market analysts believe Lloyds stock is undervalued for a large-cap FTSE 100 banking institution, so it could represent a bargain. Moreover, this is one of the best cheap dividend stocks under $5 to buy right now. The dividend yield at the time of writing is 4.6%, which translates into a P/E ratio of nearly 6 times.
5. B2Gold – International Gold Mining Company Under $5 per Share
If you are looking for hot stocks under $5, B2Gold is one to watch. B2Gold is based in Canada but operates internationally. The gold mining company has operations in Namibia, the Philippines, and Mali. In 2022, the business plans to produce around one million ounces of gold, nearly the same as 2021.
In the last ten years, B2Gold has significantly boosted its output. The company’s all-in sustaining cost per ounce, on the other hand, has barely changed. This suggests that the company’s operational efficiency has increased, as well as its profit margins, which is attractive to potential investors.
In terms of its performance on the stock market, over the last five years, B2Gold has outperformed the VanEck Juinor Gold Miners ETF by over 50%. It also beat its competitor, Barrick Gold, by almost 87% in the same period.
The VanEck Gold Miners ETF acts as the benchmark for the overall performance of the gold mining industry. As such, this shows us that after over five years of trading, B2Gold has beaten the market with ease. If you would like to earn a passive income whilst holding the best stocks under $5, B2Gold offers an industry-leading dividend yield.
The dividend yield at the time of writing is 3.25%. The last payment received by shareholders was $0.16 per share. The P/E ratio of B2Gold is at over 12 times as of publication. Some market commentators believe that B2Gold could be trading around 17% lower than its actual value.
6. Grab – Multifaceted Tech Company Based in Asia
Launched in 2012, Grab is referred to as a ‘super app’ that is largely used in the Asia region. This covers a large geographic footprint which includes the Philippines, Malaysia, Vietnam, Indonesia, Cambodia, Singapore, and Thailand. The Grab app primarily provides ride-hailing and delivery services.
In Q3 2021, the app had over 22 million monthly active users. Grab also happens to be the largest platform of its kind in the South East Asia area, making it the go-to app for grocery and food deliveries as well as taxi services.
Grab is also in the financial services sector as it includes a mobile wallet with a variety of features, such as buy-now, and pay-later options. Grab’s goal is to make it simple for Southeast Asian consumers to handle every aspect of their every day from one app. In terms of its performance on the stock market, Grab was listed on the NASDAQ in December 2020 at a little over $12.
By January 2021, shares had increased to $16.75, which remains the stock’s highest price to date. In November 2021, Grab reached almost $16.40, however within a month, shares in the company had plummeted to around $7. To further explain, Grab reported a quarterly loss of over $1 billion in December 2022.
This caused shares to crash by almost 60%. This was largely down to the company’s generous driver incentives and promotional offers to customers. Strict lockdowns in the height of the COVID-19 pandemic also had an impact on the company’s ability to grow.
At the time of writing, Grab stock is trading around 82% lower than the aforementioned all-time high. However, Grab holds the market share of its core business in South East Asia and this represents a potential growth opportunity for investors looking for the best stock to buy under $5.
7. Banco Santander – Global Banking Group With Millions of Customers
Banco Santander is a Spanish bank that offers business and retail financial services all over the world. Some of the services offered by Banco Santander include savings and current accounts, working capital solutions, and demand and time deposits. The group also offers cash management services, mortgages, consumer financing, and insurance products.
Banco Santander serves small and medium-sized businesses, as well as individuals and corporations. In nations like Spain, Italy, and Poland, it controls its core markets and is the standout leader in commercial and credit services.
It now has a presence in the US too, thanks to the acquisition of Sovereign Bancorp. In addition, Banco Santander and its partners have a sizable deposit market share in the UK and significant exposure to Latin America. As such, this could be one of the most active stocks under $5.
The bank’s fundamentals are strong, with a net income margin increase of 62% year-over-year. By the end of 2021, Banco Santander’s revenue growth was in the double digits. The P/E ratio at the time of writing is at over 6.6 times.
Many market commentators believe this is one of the few European banks with enormous upside potential, given its geographically broad activities and recent performance. This company pays dividends twice per year. The last payment was $0.05 per share.
If you also believe Banco Santander is one of the best stocks under $5, invest now for potentially attractive gains later down the line.
8. Nano Dimension – Pioneer of Additively Manufactured Electronics
Nano Dimension, established in 2012 in Israel, creates 3D-printed electrical devices. It manufactures multilayer printed circuit boards using 3D software for printed circuit boards (PCBs), nanomaterials, and 3D inkjet. It makes these circuit boards with its DragonFly lights-out digital (LDM) technology.
The company describes this as the sole full additive manufacturing platform for 3D printing electrical circuitry. In 2022, the company announced it is relocating its US headquarters to the greater Boston region as part of its business plan.
This is so Nano Dimension can work closer to research and academic organizations that were early adopters of its ground-breaking Micro-AM, PE, and AME technologies. Nano Dimension’s new location is close to Boston University, Harvard, and MIT, as well as a number of other private and public institutions and research and development facilities.
Since a reverse merger in August 2014, Nano Dimension has traded on the Tel Aviv Exchange, and its American Depositary Shares have been listed since March 2016. Nano Dimension has experienced many volatile price swings since its IPO, so has the potential to be one of the best day trading stocks under $5.
9. Sunworks – Invest in the Renewable Energy Sector for Under $5 per Share
Sunworks specializes in the management and development of solar energy projects. This is one of the best clean energy stocks under $5. Some of its services surrounding solar power include performance evaluation, project management, installation, financing, and procurement.
The company provides photovoltaic systems for every type of client from businesses and residential, to municipal and agricultural. Some investors appeared to be prepared to wager that President Joe Biden’s infrastructure plan will have a direct influence on equities in this industry.
Between 2020 and 2021, total Sunworks sales climbed by more than 150%. That being said, this seemed to make no difference to its share price. Sunworks started 2021 at around $5, skyrocketed to around $23 in late January, and had fallen to $8 by May. Since then, the stock price has steadily declined.
This is because the company has made big changes to its management team to drive profitable growth and operational efficiency. Sunworks also seems better positioned to increase its cross-selling processes and supply chain efficiencies.
The P/E ratio is near zero at the time of writing. However, Sunworks could be one of the fastest-growing stocks under $5 in 2022. For its 2021 fiscal year, annual revenue increased by almost 167%. Some market commentators think although wider losses will be experienced in the short term, the long-term outlook is strong.
10. Zynerba Pharmaceuticals – US-Based Clinical Stage Pharmaceutical Company
Zynerba Pharmaceuticals is a US company that specializes in the development and commercialization of patented next-generation synthetic cannabis medicines. Such medicines are designed for transdermal administration, such as patches and ointments, for use in neuropsychiatric disorders.
Zygel is a non-psychoactive cannabinoid by Zynerba Pharmaceuticals. This is a pharmaceutically manufactured CBD gel product used on people with various diseases and conditions. Zygel is packaged as a patent-protected permeation-enhanced gel for transdermal distribution via the skin and into the circulatory system.
Cannabidiol, the active component in Zygel, was awarded orphan drug classification for the treatment of FXS by the European Commission in February 2022. Importantly, this company has remained in the development stage since 2018 and is yet to record any revenue.
This is somewhat understandable as in this industry, Zynerba Pharmaceuticals is a new company. Throughout 2022, Zynerba Pharmaceuticals will continue to recruit patients in its confirmatory and pivotal Phase 3 study in Fragile X syndrome. This will also include a Phase 3 program in autism spectrum disease.
The business is also scheduled to release topline data from its 22q11.2 deletion syndrome Phase 2 study. The all-time high of this stock was reached in July 2019 when shares were trading at over $15. Some market commentators think the stock is trading 78% lower than its fair value and according to recent reports, short-term interest is rapidly increasing for Zynerba Pharmaceuticals.
If you think there is potential for the upswing, this might be one of the best stocks under $5 to buy right now. In addition to the above-mentioned progress made by Zynerba Pharmaceuticals, the company announced better than expected quarterly earnings in March 2022, so things are looking up.
How to Find the Best Stocks Under $5 to Buy Now
In the seconds below, we discuss the most important factors to consider when searching for the best stocks under $5 for your portfolio.
Financial statements are crucial to finding the best stocks under $5 because they may reveal a lot about a company’s overall health, covering operating costs, income, debt burden, and profitability.
Not to mention the company’s capacity to satisfy its short and long-term financial commitments.
The SEC requires publically listed corporations to submit quarterly reports. Each report will include information on plans and projections, operation costs, cash flows, and disclosure of recent profits.
See some things below you might look for:
- What was the company’s performance in the previous quarter?
- How did the latest result compare to the previous quarter?
- Have revenues increased or decreased from quarter to quarter?
The days leading up to and following the release of an earnings report is a critical time to pay attention to a company’s stock price. The stock price can rise or fall dramatically depending on whether a firm reaches its earnings projections.
Price to Earnings Ratio
The price-to-earnings ratio, or P/E, is a good way to try to establish whether stocks under $5 are under or overvalued.
- In a nutshell, the P/E ratio reflects how much the market is ready to pay for a company now based on its previous or projected profits
- The comparison of a company’s P/E to other firms in the same industry can also determine if it is a decent valuation
A lofty P/E ratio can indicate that a stock’s price is high in comparison to its earnings and may be overvalued. On the other hand, a rise in a company’s P/E ratio might also indicate that its financial fundamentals have improved, justifying the higher value.
A low P/E ratio might imply that a firm is currently cheap. This can also mean that it is performing extremely well in comparison to its historical patterns. Many investors use the P/E ratio as a way of comparing a stock with the wider market.
Earning a passive income certainly isn’t a deal-breaker when looking for the best stocks under $5, but if this is something you’re interested in, look out for dividends.
For instance, Lloyds TSB is the best cheap dividend stock under $5. The banking institution has a running dividend yield of 4.6% at the time of writing.
Stocks under $5 are usually more volatile than large-cap equities. Although as we’ve explained, some penny stocks also fall into this category.
To find the best stocks under $5 for you, you should first determine your risk tolerance.
- Are you looking to target above-average gains?
- If that’s the case, you could be considered a high-risk investor
- Alternatively, are you looking for long-term stability and are willing to take a lower rate of return in exchange?
- If that’s the case, you’re probably a low-risk investor
The majority of investors fall somewhere in the middle. That is why diversity is crucial. You might also look to learn how to carry out technical analysis. Some investors use standard deviation to determine how volatile the market is.
That is to say, if share prices are experiencing sharp jolts in either direction, the standard deviation is usually high, which can indicate a more volatile and risky stock.
Are Stocks Under $5 a Good Investment?
Even the best stocks under $5 do not represent an easy way to make money, however, there are key advantages to electing to purchase this type of share.
This includes the following:
Diversifying is Simplified
When you have your sights set on the best stocks under 5 dollars to buy now, you can easily create a diverse portfolio of assets.
- This is because, whilst some shares cost thousands of dollars, you could easily opt to allocate just $25, for instance, and add at least five stocks to your portfolio.
- Not only is this cheaper, but you can add numerous sectors to your basket of stocks and if one or more fails, others might provide you with solid returns.
- Many investors buy stocks but also add some other assets, such as penny cryptocurrencies for example.
eToro makes this simple, as you can access a wide range of assets, with 0% commission on stocks and ETFs, and super low and transparent fees on crypto and other markets.
Stocks Under $5 Could Have Upside Potential
If after checking the financial reports of a company you think it’s undervalued, you are able to add it to your portfolio at a discounted price.
This means that you could add stocks under $5 to your portfolio and sit back and wait for them to reach the perceived intrinsic value.
Where to Invest in Stocks Under $5
Once you have made your mind up about what you consider to be the best stock under $5, you will need to turn your attention to where you can complete your purchase.
To buy stocks, you will need to create a portfolio at a brokerage. We like eToro, as the broker offers 0% commission across all stocks.
For more information about eToro, read our full review below – which should enable you to make an informed choice.
1. eToro – Best Broker to Buy Penny Stocks at 0% Commission
eToro is the overall best trading platform to buy stocks under $5 with 0% commission. There are thousands of stocks listed at this brokerage, from marketplaces around the globe. The platform is approved by regulators in the US, among other tier-one licensing bodies.
You can fund your account with $10 or more to start buying stocks and there are multiple payment options accepted. This includes debit and credit cards, US bank wire transfers, and ACH. Alternatively, you can choose the convenient option of an e-wallet, such as PayPal, Neteller, or Skrill.
There will be no deposit fee taken by eToro when you finance your account in the US. The minimum stock purchase here is just $10 and most beginners will find placing trading orders easy as the site is user-friendly and uncomplicated. All the stocks under $5 we’ve talked about today are listed by eToro.
You can also opt to diversify by trading commission-free ETFs. Alternatively, US investors can buy cryptocurrency across 60 leading tokens. Notably, if you wish to trade another asset later on, but it’s out of your price range, you can partake in fractional investing by allocating just $10 each time you place an order. Some stand-out features at this brokerage include smart portfolios.
You can choose a sector or theme such as chip-tech, renewable energy, big banks, utilities, and more. After investing, you will have a managed basket of stocks in your portfolio, crucially without placing orders yourself. Another option at eToro is you could invest in the best stocks under $5, as well as copy trading.
The latter is a feature offered by the broker whereby you can allocate funds to a more experienced stock investor. After this, every position they open or close will be mirrored in your own investment portfolio, in proportion to the US dollar amount allocated.
How to Buy Stocks Under $5 on eToro
As you can see from the above review, eToro offers the all-round best platform from which to buy stocks under $5.
By following the step-by-step walkthrough below, you can create a portfolio at eToro and buy your chosen stocks right now.
Step 1: Open an eToro Account
To open an account at eToro, select ‘Join Now’ from its homepage. An online form will populate for you to complete.
This should include:
- Chosen Username and Password
You will then receive an SMS. When prompted by eToro, enter the code that was sent to you.
If you later decide to activate 2FA, you can access your account by opting to receive and enter a code like this in the same way but each time you sign in.
Step 2: Upload ID
As part of the KYC procedure, you will be required to provide confirmation of your ID and residence. This is usually speedy and simply involves taking a photo or scan of your passport, state ID, or driver’s license.
For confirmation of residence, you can attach a copy of an energy bill or bank statement. Many other documents are supported, albeit, whatever you choose must be dated within the prior three months.
You will also be asked to fill in a brief questionnaire about your previous trading experience.
Step 3: Deposit Funds
When it’s time to fund your account so that you can start buying the best stocks under $5, there are many options.
As a US investor, there is no deposit fee charged when financing your eToro account.
You can choose between the following payment types:
- Credit or debit card
- Online banking
- Bank wire transfer
- E-wallets including Skrill, Neteller, and PayPal
You will also need to tell eToro how much you want to add to your account.
You can enter $10 or more in the field labeled ‘Amount’. Once you’ve completed this step, you will see the amount appear as available equity in your portfolio.
Step 4: Search for Stocks Under $5
At this stage, you can type your chosen stock into the search bar, which you will see at the top of the eToro dashboard.
Here, we are looking for Gevo – as it is one of the best stocks under $5, not least becuase we see long-term potential in the broader renewable energy sector.
When you see your chosen market, select ‘Trade’. This will automatically reveal an online trading order for you to complete your purchase.
Step 5: Buy Stock Under $5
When the trading order appears, you can enter the amount you are willing to risk on buying shares in your chosen company.
Here are allocating $10 to Gevo stock.
Think about how much you want to stake and enter this amount in the field labeled ‘Amount’. To confirm your order, click ‘Open Trade’ or Set Order if the market has closed for the day.
In this guide, we have talked about the 10 best stocks under $5 to buy in 2023.
We covered a variety of different sectors, including renewable energy, banking, genome analysis, gold mining, brewing, and more. As such, there should be something to suit every investor’s profile.
If you haven’t chosen a trading platform yet, eToro offers a safe space to buy stocks at 0% commission. US clients pay no fees when funding an account and the minimum deposit is just $10.