Cheap blue-chip stocks under $15 can be rare finds. Typically since financially sound firms with recognizable names have histories of strong performance and often include dividends, their prices tend to be higher.
But that isn’t exclusively the case. Although they usually trade near or above $100, cheap blue-chip stocks under $15 can be found. That’s the price of a few gallons of gas. In return, investors own equity in relatively stable firms that have reasonable upside and pay attractive dividends with high yields in many instances.
Are these stocks bulletproof? No. There is risk involved but the upside cancels out that risk for many investors. Those who fall into that camp should read on below.
Ford (NYSE:F) stock doesn’t represent the same company it used to. That statement fairly indicates the turning point facing the company. For some the legacy Detroit automaker’s pivot toward an EV future is lamentable. For others, it represents a massive opportunity.
There is little denying that pioneering EV firm Tesla (NASDAQ:TSLA) has created a new paradigm in automotive stocks. The truth is that EV stocks command far greater valuations than their internal combustion counterparts. Ford knows it, General Motors (NYSE:GM) knows, and Wall Street knows it.
Ford stock commands a P/E ratio of 6.31 at the time of writing. Tesla’s P/E ratio is around 55. In short, Ford knows investors are willing to pay more for a dollar of the earnings of an EV manufacturer. The company wants to attract that investor capital. And in order to do so it is quickly introducing a revamped EV lineup. Demand is strong and that’s why Ford is among the cheap blue-chip stocks under $15.
Orange (NYSE:ORAN) is a French telecom giant with a history dating back to the late 1700s.
While the company doesn’t have a large U.S. presence, it is very recognizable in Europe with advertising any European sports enthusiast can easily envision. What’s important for investors to note is that Orange has roughly 20% upside baked into its average target stock price and a dividend yielding 5.61%.
That implies that investors could reasonably expect to see returns in the range of 25% with an investment horizon of 12 to 18 months.
Orange is performing reasonably well. In Q3, revenues increased 1%, reaching EUR 10.82 billion. And revenues increased 0.4% in the first nine months of 2022. During the same periods, EBITDA grew by 0.2% and 0.5%, respectively. In short, Orange isn’t growing rapidly but neither is it shrinking. The dividend is volatile and was reduced in 2020. The risk is evident but the upside is arguably more attractive.
BASF (OTCMKTS:BASFY) is a German multinational chemical firm that continues to grow while also dealing with macroeconomic headwinds. Those investors who believe in the company will be rewarded with a dividend yielding 5% and a modest 8.8% upside built into target prices.
In short, BASF has been able to pass higher prices on to its customers. In the most recent quarter sales volume decreased 7.2% but prices increased by 9.6% and the firm saw sales rise 11.6% to EUR 21.946 billion. While that sounds positive, the effects on net income were quite negative with a 27.5% decline to EUR 909 million in Q3.
It’s clearly a mixed bag for BASF, but it’s still one of the best cheap blue-chip stocks under $15. The positive is that BASF sees moderate demand growth in 7 of 8 key industries throughout the remainder of 2022. Another positive for the stock is that it is projected to trade above $20 based on the future cash flow (FCF) model.
Bayer (OTCMKRS:BAYRY) includes a dividend yielding 2.5%. That’s a nice incentive. What really makes Bayer interesting is how well the company is performing despite the larger economic environment.
The company’s earnings results from a few weeks ago are quite impressive. In Q3, sales increased 5.7% to EUR 11.281 billion. The company also posted impressive net income numbers with EUR 546 million in Q3. That was a large improvement over the EUR 85 million the company posted in Q3 ‘21. The rapid increase was attributable to the positive effects from discontinued businesses is a positive nevertheless.
For investors, the news remains very positive because although BAYRY stock trades for $13.94 it boasts an average target price of $19.34. That impressive potential upside over the next 12 to 18 months is sweetened by the 2.5% dividend, making it quite attractive overall.
Barrick Gold (GOLD)
Barrick Gold (NYSE:GOLD) is a stock worth purchasing. Investors should understand that the nature of gold mining is inherently volatile.
Investors who are willing to ride the ebbs and flows may be rewarded handsomely. Barrick is one of the top 2 gold producers globally and its scale alone makes it a reasonable choice for investing in gold.
The firm’s Q3 earnings report states that the company remains on track to reach its 2022 production goals. The company is also on track to again grow its reserves net of depletion in 2022. That means the company will have the strategic benefit of swelling excess of gold. It can use that supply to buffer any unfavorable price swings or production hiccups.
The company continues to steadily increase its gold production with 1,092 tonnes of gold mined in Q3. That’s more than the 1,043 mined in Q2 and 104 more tonnes than it mined during the same period a year earlier.
GOLD stock benefits from a dividend yielding more than 4% and a share buyback program totaling $1 billion. To date, $322 billion worth of buybacks have occurred, meaning steady returns are likely in the future as Barrick continues to reward shareholders.
Vale (NYSE:VALE) stock doesn’t have a lot of near-term upside based on its target price. In most cases that’s not a great sign for investors as they seek signals of positive returns first and foremost.
But what Vale lacks in price-based upside it makes up for with dividend yields. That dividend yields an impressive 9.37% on both a trailing and forward basis. That means investors are essentially guaranteed to make in the range of 10% returns by investing in VALE stock.
The company’s payout ratio is 0.36. That means the company pays 36% of earnings back to investors as a dividend. And investors can sleep easily given that a range between 35% to 55% is considered ‘healthy’.
The company mines iron and nickel with Q3 seeing both revenues and net income fall. But investors shouldn’t worry much because Vale’s share prices have tended to fluctuate in a range between $10 to $20 over the last few years. Investing in Vale is done more for the dividend than for the returns based on price appreciation.
Stellantis (NYSE:STLA) stock represents another of what used to be the big-3 American automotive firms. Although Stellantis is now based in the Netherlands it consists of what used to be known as Chrysler/Dodge. Today it includes Abarth, Alfa Romeo, Citreon, Dodge, Fiat, Lancia, Jeep, Opel, Ram, and more.
And STLA stock includes a healthy 7.55% dividend and 33% upside based on target prices. Stellantis’ vehicles don’t have the best reputation for reliability.
Perhaps it’s no surprise then that the stock carries a P/E ratio of 2.8. That is better than 98.7% of industry competitors but also indicates that investors don’t highly value a dollar of Stellantis’ earnings relative to its competitors.
And while its vehicle may be lackluster, the firm’s ability to invest is not. Its return on invested capital is 13.56% while its weighted average cost of capital is 7.85%. That qualifies it as ‘value creating’ and is another fundamental reason to invest in its stock even if its vehicles aren’t particularly attractive.
On the date of publication, Alex Sirois did not have (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.