Investors just getting started might not have a lot of cash to put into the stock market right now. Inflation continues to challenge many household budgets, and finding the money for investing might not be a priority for some. But smart readers know the importance of just getting started with investing.
The good news is many brokerages make it easy to start with any amount of money, even just $100. Some will let you buy fractional shares, which could come in handy these days when it seems finding a stock trading for less than $100 per share is getting harder and harder. Still, there's something to be said about owning a full share of a company's stock; it can make you feel like a true shareholder.
Here are three no-brainer stocks to buy now for less than $100 to get you started.
PayPal (NASDAQ: PYPL) saw its business boom amid the start of the COVID-19 pandemic. But as consumer behavior normalized, the company has seen some headwinds for further growth.
Notably, its branded checkout, where you click the PayPal button on an e-commerce site instead of typing in your credit card details, has seen its growth slow to a crawl. Total payment volume through its branded checkout service increased just 6% year over year in the second quarter. That's notable, because the profits on branded checkout are much higher than unbranded card processing, which now accounts for the bulk of PayPal's total payment processing business.
But the impact of slow branded checkout on PayPal's stock price may be overblown. Mizuho analyst Dan Dolev points out only a few large merchants have grown sales faster than PayPal's branded checkout, suggesting PayPal's still winning a large share of sales.
What's more, PayPal has the built-in advantage of operating a two-sided network of merchants and consumers. Consumers trust PayPal, they find it convenient, and in turn that attracts merchants to the service. The checkout rates for customers using PayPal are consistently higher than for those not using it, which directly impacts merchants' bottom lines. That should provide long-term staying power despite increased competition.
At its current stock price of about $81, shares trade for less than 17 times forward earnings estimates. With its strong position in the growing e-commerce market, it's sure to see meaningful revenue growth over the long run. The network it's built should help protect its margins, ensuring earnings grow at least in line with revenue moving forward. That makes the current price a great bargain.