The allure of low-priced stocks — especially stocks priced under $5 — is easy to understand. Investors are attracted to low-priced shares for the very real possibility of realizing big percentage gains on small price movements. Relatively small increases of just a few pennies can be quite meaningful when a stock is selling for just a few bucks.
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There’s also the psychological satisfaction of owning a large number of shares. Some folks just feel better owning 100 or 200 shares of a stock instead of one or two. This is true even though most investors understand that there is no fundamental or inherent benefit to lower-priced stock just by virtue of its affordable price. Ultimately, a stock’s performance will be based on the company’s financial fundamentals, its ability to execute its business plan and supply and demand factors. A stock’s price — on an absolute basis — is not an indication of quality, per se.
That said, bargain stocks do exist, and this is especially true in stocks under $5 because many mutual funds and institutional investors are prohibited from buying such shares, or they just ignore them in favor of big names trading at higher prices. If you do your homework, invest for the right reasons and can afford to assume the risks associated with low-priced stock, there may be a lot of money to be made in low-priced equity securities.
This list of five stocks trading for less than $5 isn’t intended to be definitive, but the companies included do have real potential and are well worth looking into:
| Stock | Market Capitalization |
| Ribbon Communications Inc. (ticker: RBBN) | $845 million |
| Ares Commercial Real Estate Corp. (ACRE) | $265 million |
| Roadrunner Transportation Systems Inc. (OTC: RRTS) | $187 million |
| Brandywine Realty Trust (BDN) | $835 million |
| B2Gold Corp. (BTG) | $3.8 billion |
Ribbon Communications Inc. (RBBN)
Plano, Texas-based Ribbon Communications is a dynamic communications and information technology company with a market cap around $845 million. The company designs and distributes innovative software solutions designed to support the critically important digital infrastructure sector of our high-tech economy.
The company as it’s now structured was created through the 2017 merger of Genband and Sonus Networks and has been helping its clients improve competitiveness by modernizing and upgrading their networks ever since.
Ribbon’s focus is on cloud computing communication tools and IP optical networking solutions tailored specifically for 5G wireless networks and whatever comes after. Verizon Communications Inc. (VZ) can be counted as one of the firm’s trusted partners. The two companies have worked together on several projects to boost connectivity, speed and performance for Verizon’s individual and business customers
Ares Commercial Real Estate Corp. (ACRE)
Ares Commercial is a $265 mortgage real estate investment trust, or mREIT, with a relatively low stock price and a high yield, which currently sits around 12.3%.
This company is not a typical mREIT that issues standard commercial mortgages or holds commercial mortgage-backed or residential mortgage-backed agency bonds. ACRE is more akin to a specialty finance company. Its direct commercial real estate investments include senior mortgage loans, subordinate debt, preferred equity loans (high-interest loans with an equity component) and mezzanine loans.
In September 2024, ACRE reported it had made 40 loans for a total volume of about $2 billion for that year thus far. That performance demonstrates the strong demand for the company’s financing products, and highlights the diversification of its portfolio.
[READ: 5 of the Best Companies to Invest In for 2025]
Roadrunner Transportation Systems Inc. (RRTS)
Roadrunner Transportation Systems is a logistics company. Logistics encompasses all the details of the transportation industry. Everything from choosing the right truck or commercial vehicle to scheduling drivers and planning routes, to tracking shipments and a lot more.
Roadrunner Transportation is a $187 million company that’s committed to delivering innovative, customer-focused logistics solutions for its clients. In short, from pickup to delivery it keeps its customers’ freight moving over the highways of America.
The company was founded 20 years ago in 2005 and has been successful by embracing technology and designing efficient transportation management systems.
Small freight companies appreciate Roadrunner’s Less-Than-Truckload service the company calls LTL. The LTL system allows small shippers to share space in trucks that have extra room. This saves customers significant money compared to the cost of paying for a whole truck that would be half empty.
Brandywine Realty Trust (BDN)
The office segment of the commercial real estate industry has been particularly challenging since the COVID-19 pandemic. Real estate companies in that space need to be smart to make it. The $835 million office REIT, Brandywine Realty Trust, is not immune to the challenges but has executed an intelligent strategy that has allowed it to survive and thrive in a difficult environment.
Brandywine’s strategy has focused on choosing prime locations in and around growing population centers. The company owns and operates top-tier, class-A office and mixed-use properties. The company was founded in 1986 as Linpro Company but rebranded and changed its name in 1994. Its primary markets are Austin, Philadelphia and Washington, D.C.
Brandywine’s portfolio includes more than 125 properties comprising more than 19 million square feet of rentable space. Its flagship development is Schuylkill Yards in Philadelphia. That $4 billion project is being developed in partnership with Drexel University. It spans 14 acres in the center of Philly’s urban and academic life and includes a 1.3-acre public park, science centers, office towers and luxury apartments.
The stock has a current dividend yield of 12.5%.
B2Gold Corp. (BTG)
B2Gold Corp is a rare example of a multibillion-dollar company with a stock price under $5. BTG, in fact, has a market cap of about $3.8 billion and is a prominent gold exploration, mining and production company with operations in Mali, Namibia and the Philippines.
This metals and mining company has been lauded by the precious metals industry and environmental advocates for its efficient use of natural resources and respect for the land, but what makes it a good investment candidate is its sterling balance sheet.
BTG has low debt levels compared to its peers in the gold mining space. At the same time, its free cash flow and cash reserves are high. The company’s solid financials have prompted its board of directors to set the forward annual dividend at 8 cents a share, which works out to a 2.8% yield for shareholders.
Global and geopolitical uncertainties abound in the world today. In the face of such uncertainties, gold has maintained its reputation as a dependable store of value and hedge against rising prices, hitting all-time highs in the process, and making BTG stock one of the more compelling sub-$5 stocks on the market today.
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5 Best Cheap Stocks Under $5 to Buy Right Now originally appeared on usnews.com
Update 02/26/25: This story was previously published at an earlier date and has been updated with new information.
