3 Dirt Cheap Stocks to Buy With $500 Right Now

After experiencing a temporary drop earlier this year due to tariff worries, the S&P 500 has once again started rising as these fears subsided. Consequently, this widely followed market index now stands at around 22 times its future earnings, which is close to its highest levels in the last 25 years.

In today’s more expensive market environment, there are still a number of stocks that can be purchased at very low prices. Notably, Realty Income (O), Energy Transfer (ET), and Alphabet (GOOG) (GOOGL) appear to be particularly inexpensive. For those with $500 to invest, these stocks could be attractive investment opportunities at the present time.

An AI bargain

In simpler terms, among the seven major tech companies, Alphabet is currently trading at a relatively low market value, approximately 19 dollars for every anticipated future dollar in profit. This is quite affordable when compared to other high-growth stocks that demand over 27 dollars for each projected dollar in future earnings.

What factors might be preventing Alphabet’s market value from growing? There seems to be apprehension about how artificial intelligence could affect its profitable search sector. However, it appears that AI chatbots have not yet impacted their advertising income adversely. In fact, Google’s search revenue increased by 10% during the first quarter, reaching nearly $51 billion.

I’m thrilled about the progress we’re making with AI! Our CEO, Sundar Pichai, announced in our first-quarter earnings that our search engine is flourishing due to the engagement people are having with features like AI Overviews, which now boasts an impressive 1.5 billion users monthly. Not only that, but we’ve just unveiled our Gemini 2.5 AI model, which is delivering remarkable improvements in performance and laying a solid groundwork for future innovation, as Sundar put it. We’re also broadening our horizons with other ventures like Google Cloud, YouTube, and more. Alphabet’s promising long-term growth prospects make it seem like an enticing investment choice right now.

A dirt cheap REIT

As a prominent Real Estate Investment Trust (REIT), Realty Income stands out with a varied investment portfolio, consistently providing steady rental income through long-term lease agreements. The management anticipates that the REIT will produce FFO between $4.22 and $4.28 per share this year. Currently, shares of this REIT are trading below $57, making them available at a multiple of less than 13.5 times their projected future earnings. This affordable price tag is what makes it an appealing option with a dividend yield exceeding 5.5%.

Increased interest rates have posed challenges for REITs like Realty Income, as they now find it costlier to secure loans for fresh investments. Despite these difficulties, Realty Income persists in its consistent growth trajectory. The company executed approximately $1.4 billion worth of acquisitions during the first quarter alone, thereby increasing its monthly dividend on multiple occasions this year. Realty Income anticipates having around $4 billion available for portfolio expansion throughout this year.

Higher interest rates are making it more expensive for companies like Realty Income to take out loans for new investments. However, despite these challenges, Realty Income is still growing and has recently made a significant amount of acquisitions. It also plans to invest billions in expanding its portfolio this year.

Should interest rates decrease, as is widely anticipated, Realty Income could potentially expand its acquisition portfolio more extensively. This growth would likely enhance its overall value.

A bottom-of-the-barrel valuation

In simpler terms, Energy Transfer is one of the biggest partnerships in the U.S., specializing in midstream operations. This company manages a broad array of energy infrastructure properties, including pipelines, processing plants, storage facilities, and export centers. These assets consistently produce a steady income stream, with about 90% coming from fee-based arrangements.

Although Energy Transfer has a steady income stream, its current trading price is among the lowest within its industry peers. This significant undervaluation contributes to its impressive 7.5% distribution yield.

Apart from the annual distribution of Schedule K-1 federal tax forms to investors, there’s no apparent justification for Energy Transfer’s current undervalued status. The MLP is financially robust, with a leverage ratio that falls within the lower half of its target range, signifying financial strength. Furthermore, it maintains a relatively low distribution payout ratio, which stands at less than half of its consistent cash flow. This indicates a healthy financial situation.

Moreover, the company is experiencing steady growth, with an anticipated acceleration in 2026 and 2027 due to numerous project completions on the horizon. These projects are expected to provide significant growth momentum, enabling Energy Transfer to continue boosting its high-yielding distribution well into the future.

Cheap stocks in a pricy market

As an avid investor, I’m always on the lookout for undervalued gems amidst the bustling market landscape. Even though the S&P 500 seems a bit overpriced, there are some real bargains out there that are too good to pass up! Alphabet, Realty Income, and Energy Transfer are currently trading at rock-bottom prices. Despite facing some challenges, these companies boast impressive growth prospects that make them perfect buys right now for the savvy investor with around $500 to spare.

2025-07-22 03:26

An AI bargain

A dirt cheap REIT

A bottom-of-the-barrel valuation

Cheap stocks in a pricy market

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