Investing in the stock market has never been easier or more accessible. The mechanics of buying and selling stocks has been democratized. Transaction costs were eliminated, financial information is freely available and faster technology even makes day trading possible (don’t do that!).
In short, it no longer takes money to make money. With as little as $500 you can begin buying and selling stocks to start building a retirement portfolio. The stock market used to be the province of the wealthy, but the playing field has been leveled. And you should be investing today.
No other asset class has helped grow wealth the way stocks can. A Deutsche Bank study showed that over the past 100 years, stocks surpassed the performance of gold by 5.6% annually, housing prices by 6.6%, Treasuries by 6.8%, and oil by 8.4% per year. It means if you are going to be putting your money to work anywhere, it ought to be in stocks.
If you are looking to accelerate your wealth growth rate, then the companies below are three stocks to buy with $500 today.
Energy Transfer (ET)
As its name implies, midstream energy play Energy Transfer (NYSE:ET) is positioned in a prime spot of the oil and gas industry. It is the middleman that transports hydrocarbons, such as natural gas, natural gas liquids (NGLs), crude oil and refined products. It is spread fairly evenly across these hydrocarbons: about 27% of its business is in NGLs and refined products, 22% in crude, 21% in natural gas pipelines and 18% in gathering and processing. Over the past decade, Energy Transfer built itself into one of the largest midstream energy companies, with over 125,000 miles of pipeline. Particularly in exports, it is the industry leader with a 20% share. Yet that is where its biggest risk lies.
In January, President Joe Biden killed all new liquid natural gas (LNG) project permit approvals. His Energy Department denied ET’s request for an extension on its deadline to complete its Lake Charles LNG project. That will result in further delays, raising costs.
Fortunately, Energy Transfer generates substantial cash flows from the rest of its business. Even after paying its distribution, which yields 8% annually, the midstream player will still be able to fund its various projects. It continues to invest in more infrastructure and has committed to spending between $2 billion and $3 billion on capital expenditures each year.
For the past few years, Energy Transfer has been hiking its distribution every quarter and last month raised it again by 3.3%. As energy stock is also one of the cheapest in the industry, it would be an excellent wealth builder for your portfolio.
CrowdStrike Holdings (CRWD)
Cybersecurity will continue to be of primary importance as businesses maintain their digital transformations and migrate their data to the cloud. CrowdStrike Holdings‘ (NASDAQ:CRWD) unique leadership in endpoint security separates it from the competition. Endpoint security is protecting from attack the “endpoints” of data usage: desktops, laptops and mobile devices.
CrowdStrike’s Falcon platform is the industry leader and should gain the lion’s share of the industry’s growth. According to Mordor Intelligence, the $19.6 billion endpoint security market will grow at a compounded rate of almost 8% annually through 2029 when it will hit $28.8 billion.
Not willing to stand still, though, CrowdStrike enhanced Falcon’s security offerings by adding cloud security, identity security and security operations to its portfolio. Through a combination of artificial intelligence (AI), machine learning and human intervention, the platform sifts through trillions of events weekly. It quickly recognizes and responds to potential threats over time as it learns and grows.
Customers are flocking to the platform. Subscription customers using five or more, six or more, and seven or more CrowdStrike modules grew to 64%, 43%, and 27% of subscription customers, respectively. And the number of customers with over $1 million in annual recurring revenue (ARR) grew to more than 580. It ended its fiscal year with 29,000 subscription customers, and ARR was up 34% year-over-year.
While the stock is up 27.5% in 2024, shares are actually down 2% in the last three months. This sideways action provides a launchpad for investors to get on board before the next leg of growth takes off.
Pinterest (PINS)
Pinterest (NASDAQ:PINS) was always a stock just ready for liftoff. The idea collation site rises and falls on advertising revenue. While it was a market darling through the pandemic, investors backed away after out-of-home activities started up again. Uncertain economic conditions also caused ad dollars to dry up.
That’s no longer the case. Pinterest trounced its own revenue guidance, reporting $740 million compared to the $705 million it previously thought it would generate. CEO Bill Ready noted it was the “fastest user and revenue growth since 2021.” The number of global monthly active users surged 12% to 518 million.
No wonder advertisers are showering Pinterest with money. It has been the case the site was a perfect destination for marketers. People collating their ideas are signaling these are the types of things they want and are looking to buy. It’s an advertiser’s dream, and they are seeing more conversions. Pinterest reported its application programming interface (API) for conversions grew to 40% of revenue from 27% last September.
While the stock is up about 24% since the report, there is more room to grow. The stock remains well below its pandemic highs, but it’s clear Pinterest has found the formula for generating wealth.
On the date of publication, Rich Duprey did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
