The Smartest Stocks to Buy With $20 Right Now and Hold Forever | The Motley Fool (2024)

Does a stock's absolute price level actually matter? There's an ongoing debate over the premise. Some investors argue that bigger stock prices reflect higher-quality companies. Others say a stock's price is purely arbitrary, in the same sense that four quarters is the equivalent of holding a single dollar bill.

The thing is, regardless of the pros and cons of a big-number stock price, it's easier to buy a more meaningful number of shares when a stock's price is relatively low. For investors without a ton of cash to work with at any given time, the lower the price, the more shares that can be purchased.

If that's where you are right now, here's a closer look at three different ownership-worthy stocks that can all be bought for less than $20 apiece.

1. Rocket Lab USA

Current price: $4.92 a share

You may not be familiar with Rocket Lab USA (RKLB -3.11%). But the odds are good that you benefit from the service it provides without even knowing it.

As the name suggests, Rocket Lab USA puts things into orbit. Its rocketry operations have launched more than 170 satellites to date, while more than 1,700 satellites use at least one of its satellite technologies. It's even working to help humanity get back to the moon.

This sort of work used to be within the purview of government agencies like NASA or the European Space Agency. But privatized service providers are proving they can do the job at least as well as government-run entities can, if not more so. They can also handle the sheer growing need for satellite launches stemming from the mountain of digital information the world is now capable of creating.

This demand is set to swell for the foreseeable future too. Straits Research suggests the space-launch service market will grow at an average annual pace of nearly 16% through 2030, jibing with outlooks from Polaris Market Research and Precedence Research.

It's still not a pick for the faint of heart. Rocket Lab USA is currently unprofitable, and is expected to remain in the red through 2025. Unprofitable companies can make for unpredictable stocks.

Look at the bigger picture, though. Analysts expect revenue to swell from last year's tally of around $257 million to $1.8 billion in 2028. That's enough forward progress to inspire the analyst community to call for a swing to a slight profit as soon as 2026. This stock may be worth whatever volatility awaits in the meantime, and then afterward.

2. Plug Power

Current price: $3.40 a share

Using hydrogen-based fuel cells to produce electricity isn't exactly a new idea. Fuel cell maker Plug Power (PLUG -1.58%) isn't exactly a proverbial spring chicken either. It's not a stretch to say that neither the technology nor this company has lived up to their initial hype.

Now hydrogen fuel cell energy is finally finding its full stride, and Plug Power isn't far behind.

The game-changer is the growing affordability -- and availability -- of hydrogen itself. While the price of hydrogen produced by environmentally friendly methods soared all the way through 2022 -- hampered by (among other things) supply chain disruptions stemming from the COVID-19 pandemic -- this supply chain dust is finally settling. It's also settling at the same time the clean-hydrogen industry finally has a firm grip on cost-effective large-scale production.

These two related trends are apt to continue marching in their respective directions too. PwC predicts the production price of so-called green hydrogen will be cut in half between now and 2030, while production of it should ramp up from practically nil now to on the order of 400 million tons of it per year by 2050, according to McKinsey. Notably, McKinsey suggests that almost all new hydrogen production facilities built after 2025 will manufacture the important "green" renewable hydrogen, realizing one of the clean energy movement's biggest goals.

Of course, more and cheaper hydrogen is exactly what companies like Plug Power have been waiting on for a long while now. Its fuel cells can cost-effectively turn hydrogen into usable electricity that's also environmentally friendly. This tech can be used to power everything from forklifts to automobiles to entire buildings, when and if needed, and increasingly at a comparable cost to more traditional means of creating mechanical power.

Like Rocket Lab USA, Plug Power isn't yet profitable, and probably won't be any time in the immediate future. But like Rocket Lab, Plug Power is plugged into a tailwind that likely will push it out of the red and into the black by 2026. The company's underlying story and its fiscal trajectory by themselves could be enough to drive this ever-volatile stock higher in the meantime.

3. SoFi Technologies

Current price: $7.65 a share

SoFi Technologies (SOFI -8.30%) is not exactly a household name. Give it time, however. This online-only bank is growing fast, leveraging its wide range of traditional banking services including checking, investing, lending, and even insurance.

SoFi Technologies boasts nearly 7 million unique customers as of the end of the third quarter, up 47% from the year-earlier figure, and extending a growth trend that's been uninterrupted since the beginning of 2020. Last year's total resulting top line should roll in 33% better than 2022's tally once its Q4 numbers are reported; revenue is projected to grow another 21% this year.

Analysts believe this year's sales growth should support a swing to a per-share profit of $0.06. While that's not huge, as is the case with Plug Power, the trajectory is the key here. That's also a revenue and earnings growth pace expected to be sustained at least all the way through 2028. This growth pace may persist well beyond that point in time.

What gives?

San Francisco-based SoFi is tapping into changes in the way people as a whole view the banking business. The American Banking Association reports that 48% of U.S. banks' customers now say a mobile app is their preferred way of accessing their account online. Indeed, 57% of the Gen Z crowd and 60% of millennials indicate that apps are their most commonly used means of handling banking matters. In that the younger an individual is, the more "digitally native" they tend to be, interest in purely online app-based banks is swelling as people grow up and have tech-savvy children of their own.

It's another volatile prospect, to be sure. The company's built from the ground up to be an online-only bank, however, and is making surprising inroads with its brick-and-mortar rivals. Better yet, the vast majority of the U.S.'s bank customers are still up for grabs by a company offering a superior banking app like SoFi's.