The $10-50 price range often includes mid-sized businesses with proven track records and plenty of growth runway ahead. They also usually carry less risk than penny stocks, though they’re not immune to volatility as many lack the scale advantages of their larger peers.
Luckily for you, our mission at StockStory is to help you make money and avoid losses by sorting the winners from the losers. Keeping that in mind, here are three stocks under $50 to avoid and some other investments you should consider instead.
Keurig Dr Pepper (KDP)
Share Price: $33.50
Born out of a 2018 merger between Keurig Green Mountain and Dr Pepper Snapple, Keurig Dr Pepper (NASDAQ: KDP) is a consumer staples powerhouse boasting a portfolio of beverages including sodas, coffees, and juices.
Why Are We Hesitant About KDP?
- Sizable revenue base leads to growth challenges as its 6.5% annual revenue increases over the last three years fell short of other consumer staples companies
- Day-to-day expenses have swelled relative to revenue over the last year as its operating margin fell by 5.7 percentage points
- Underwhelming 5.7% return on capital reflects management’s difficulties in finding profitable growth opportunities
At $33.50 per share, Keurig Dr Pepper trades at 16.2x forward P/E. Read our free research report to see why you should think twice about including KDP in your portfolio.
Resideo (REZI)
Share Price: $21.13
Resideo Technologies, Inc. (NYSE: REZI) is a manufacturer and distributor of technology-driven products and solutions for home comfort, energy management, water management, and safety and security.
Why Are We Cautious About REZI?
- Annual revenue growth of 4.8% over the last two years was below our standards for the industrials sector
- Performance over the past two years shows its incremental sales were less profitable, as its 3.1% annual earnings per share growth trailed its revenue gains
- Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
Resideo’s stock price of $21.13 implies a valuation ratio of 5.2x forward EV-to-EBITDA. Check out our free in-depth research report to learn more about why REZI doesn’t pass our bar.
Vontier (VNT)
Share Price: $36.63
A spin-off of a spin-off, Vontier (NYSE: VNT) provides electronic products and systems to the transportation, automotive, and manufacturing sectors.
Why Is VNT Risky?
- Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
- Free cash flow margin dropped by 14.8 percentage points over the last five years, implying the company became more capital intensive as competition picked up
- Diminishing returns on capital suggest its earlier profit pools are drying up
Vontier is trading at $36.63 per share, or 11.6x forward P/E. Dive into our free research report to see why there are better opportunities than VNT.
High-Quality Stocks for All Market Conditions
The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.
While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today for free.
