The smartest stocks to buy with $20 now and hold forever
The stock market slump of the past few months has been nerve wracking, but it has driven down the valuations of some good, solid companies. You can find great deals on stocks under $20 per share. Investors may want to consider these two stocks that have fallen below $20 per share in recent months, as they are both built for the long haul.
1.Ford Motor Company
Ford Motor Company ( F -0.19% ) has been in recovery mode for the past two years after its stock price fell below $5 per share at the start of the COVID-19 pandemic in 2020. Shares of the automaker hit more than $25 in January and have since returned to around $15.
Ford has had its share of problems this year, but they’re not unique in an auto industry facing high inflation, rising interest rates, continued chip shortages and global supply constraints. Is the worst over? It’s hard to say, as there is so much uncertainty in the economy and the geopolitical situation, but analysts expect the stock price to rally above $20 in the next 12 month.
While supply constraints have proven to be an industry-wide challenge, the good news for Ford is that demand is high. Ford took a record 88,000 vehicle orders in March, up 33% year-over-year. F-Series trucks had the most, a record 50,000 orders last month. Truck sales and SUV sales both rose significantly in March from April as supply improved.
But put volatility and short-term trends aside: Ford is a long-term winner, primarily because of its strength and leadership in electric vehicles (EVs). In 2021, Ford was second only to You’re here in EV sales. That momentum continues, with electric vehicle sales up 16.9% in March year-over-year. In April, Ford’s highly anticipated Ford Lightning truck, an electric version of its best-selling F-150, will be released. This should give a big boost to sales. Over 200,000 Lightning Trucks were pre-ordered and Ford had to increase production to keep up with demand. By 2030, Ford expects about 40% of its sales to be electric vehicles. Its share price, market share and earnings are expected to rise with it.
Another stock that dipped in the $20 per share range is Key Corp ( KEY -0.49% ), which is the holding company of KeyBank, a Cleveland-based regional bank. Key Bank has some $184 billion in assets and is the 18th largest bank in the United States.
It is a good, strong regional bank that posted record revenues in the fourth quarter and throughout 2021, largely due to an increase in non-interest income, particularly investment banking , mortgage servicing fees and debt placement fees.
While interest income declined due to low interest rates, lending rose sharply, primarily due to the acquisition of Laurel Road in 2019. This student loan funding platform has driven student loan activity. ready for Key overall, but last year she created Laurel Road for Doctors. It is essentially a digital bank for doctors and healthcare professionals where they can refinance their debt and use other banking services. This is a niche that KeyBank expects to develop nationally.
This diversity of income and lending niches allowed it to outperform most of its regional banking counterparts last year. And with interest rates expected to rise, the bank forecasts a $150 million increase in net interest income in 2022. Analysts are forecasting a consensus return of around 26% for KeyCorp shares over the next 12 coming months.
But what really makes it a good solid long-term position is its dividend. KeyCorp declared a dividend of $0.19 in the first quarter, an above-market yield of 3.8%, which it had been for a few years, except for a peak in early 2020 when the share price of the stock fell. It is one of the most consistent dividends in its class, as it has increased the annual payout for 11 consecutive years. At a time when markets and the economy are so uncertain, a stable income you can count on becomes even more important. Additionally, tailwinds from higher interest rates and loan growth should provide stable returns barring a recession.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of a high-end advice service Motley Fool. We are heterogeneous! Challenging an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and wealthier.