The Motley Fool

4 shares under $5 for your portfolio

If you are looking to add capital growth and diversity to your portfolio, these four companies could just be the ones to do it.

Operating in a number of different sectors, these four have proven that they can generate strong growth, and even better for retail investors is that they are relatively unknown at this early stage of their ASX listing. The good news is that all four have tailwinds behind them and have plenty of room to grow in future.

Eclipx Group Ltd (ASX: ECX) latest price $3.47

Eclipx is a fleet management and car financing company that seems to slide under the radar of retail investors. That’s despite a market cap of over $900 million and research coverage by 5 brokers – all with buy ratings on the company. Perhaps it’s too boring for most investors, but whatever the case, Eclipx is one company that offers an inexpensive price, reasonable and growing dividend yield of 3.8% and net profit expected to be up by around 9% over the previous year.

Currently trading on a prospective P/E ratio of around 18.6x, and with a growing dividend, Eclipx could be just the sort of share to add to your portfolio and forget about for years.

Vita Group Limited (ASX: VTG) latest price $4.14

Vita manages and operates around 100 of Telstra Corporation Ltd’s (ASX: TLS) retail stores, and a growing number of the giant telco’s business centres too. Rationalisation of brands and stores means Vita can concentrate on its core brands and grow its offering to small to medium businesses.

Vita has managed to grow sales strongly in its stores – in the last half, like-for-like sales jumped a monster 21%. That may have been heavily influenced by sales of new smartphones, but it does show that Vita doesn’t need to add new stores to grow.

Xenith IP Group Ltd (ASX: XIP) latest price $4.25

Xenith provides intellectual property (IP), trademark and patents services to companies and organisations in Australia – in fact, it’s the oldest IP firm in Australia with a 156-year history. The company reported strong growth in net profit in the latest half-year results – up 76%, as revenues grew 21%. With thousands of diversified clients around the world, many having been with the company for over a decade and strong industry tailwinds, Xenith has strong credentials to grow in future. The bonus is an undemanding price.

IVE Group Ltd (ASX: IGL) – latest price $2.25

IVE Group is a marketing and print communications provider and the market leader in its sector, but still with a tiny market share of 8%. IVE counts a number of Australia’s leading companies and multinationals as clients including Vodafone, Toyota, AMP, Foxtel, Commonwealth Bank and Bauer Media Group.

With a cheap price, a hefty fully franked dividend yield of 7.7% in the year ahead and plenty of room to grow, IVE is a company that is completely off the radar of most investment analysts. The company also recently signed a long-term contract with Westpac.

5 stocks under $5

We hear it over and over from investors, "I wish I had bought Altium or Afterpay when they were first recommended by The Motley Fool. I'd be sitting on a gold mine!" And it's true.

And while Altium and Afterpay have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $5 a share!

*Extreme Opportunities returns as of June 5th 2020

Motley Fool writer/analyst Mike King owns shares in Vita Group and Telstra Corporation. You can follow Mike on Twitter @TMFKinga

The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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