In this article, we discuss 10 penny stocks that pay dividends. If you want to see more affordable dividend stocks, click 5 Penny Stocks that Pay Dividends.
High-risk public businesses with low market capitalization and prices under $5 are categorized as penny stocks. Amateur and retail investors usually begin their trading journeys by pouring their limited resources into penny stocks with growth catalysts, hoping they will explode in the future.
The lack of disclosures and publicly available information, short performance history, and liquidity problems make penny stocks risky investments. However, with proper research and due diligence, investors can make big bucks on their investments as well. What makes penny stocks interesting for traders is the unlimited potential for growth that they offer. For example, Ford Motor Company (NYSE:F), Apple Inc. (NASDAQ:AAPL), and Amazon.com, Inc. (NASDAQ:AMZN) once traded as penny stocks, and now they are some of the biggest industry leaders. Early investors can often cash out lucratively when penny stocks take off.
Investors with limited funds and the desire to build passive income streams gravitate towards penny stocks that pay dividends. While the most notable dividend names include Johnson & Johnson (NYSE:JNJ), The Coca-Cola Company (NYSE:KO), and Altria Group, Inc. (NYSE:MO), the focus in this article is on penny stocks that generate income.
Source: PixaBay
Our Methodology
We selected dividend stocks that were priced under $5 as of May 16. We have mentioned important performance and fundamental metrics like the latest dividend payouts, the hedge fund sentiment, Q1 earnings, and analyst ratings for the securities, where available.
Penny Stocks that Pay Dividends
10. B2Gold Corp. (NYSE:BTG)
Dividend Yield as of May 16: 3.95%
Price as of May 16: $4.05
Number of Hedge Fund Holders: 20
B2Gold Corp. (NYSE:BTG) is a gold producer with three operational mines in Mali, the Philippines, and Namibia. The company was incorporated in 2006 and is headquartered in Vancouver, Canada. Priced modestly at $4.05 as of May 16, B2Gold Corp. (NYSE:BTG) delivers a dividend yield of 3.95%, and it is one of the most notable penny stocks that pay dividends. The company distributed a $0.04 per share quarterly dividend to shareholders on March 17.
On May 3, B2Gold Corp. (NYSE:BTG) reported earnings for the first fiscal quarter of 2022. The company posted earnings per share of $0.06, beating market consensus estimates by $0.01. Revenue for the period stood at $365.58 million, outperforming analysts’ predictions by $3.58 million.
National Bank analyst Don DeMarco on April 20 reiterated an Outperform rating on B2Gold Corp. (NYSE:BTG) and raised the firm’s price target on the stock to C$8.50 from C$7.75.
The Q4 database of Insider Monkey suggests that 20 hedge funds were bullish on B2Gold Corp. (NYSE:BTG), with collective stakes worth $243.4 million, compared to 16 funds in the prior quarter, holding stakes in the company valued at $176.3 million. Jim Simons’ Renaissance Technologies is one of the leading shareholders of B2Gold Corp. (NYSE:BTG) as of the end of Q1 2022, with more than 32 million shares worth $147.20 million.
In addition to Johnson & Johnson (NYSE:JNJ), The Coca-Cola Company (NYSE:KO), and Altria Group, Inc. (NYSE:MO), B2Gold Corp. (NYSE:BTG) is an income stock on the radar of institutional investors.
9. Lloyds Banking Group plc (NYSE:LYG)
Dividend Yield as of May 16: 4.98%
Price as of May 16: $2.14
Number of Hedge Fund Holders: 7
Lloyds Banking Group plc (NYSE:LYG) is a London-based bank and financial services corporation that operates through three segments – Retail, Commercial Banking, and Insurance and Wealth. Lloyds Banking Group plc (NYSE:LYG)’s dividend yield on May 16 came in at 4.98%, making it one of the most prominent penny stocks that pay dividends.
On April 6, Lloyds Banking Group plc (NYSE:LYG) declared a $0.068 per share semiannual dividend. The dividend is distributable on May 30, to shareholders of the company as of April 8.
UBS analyst Jason Napier on April 28 reiterated a Buy recommendation on Lloyds Banking Group plc (NYSE:LYG) and raised the firm’s price target on the shares to 61 GBp from 58 GBp.
According to Insider Monkey’s Q4 data, 7 hedge funds held long positions in Lloyds Banking Group plc (NYSE:LYG), with collective stakes worth $14.7 million, compared to 8 funds in the last quarter, holding stakes in the company valued at $16.1 million. In the first fiscal quarter of 2022, Dmitry Balyasny’s Balyasny Asset Management was a significant shareholder of Lloyds Banking Group plc (NYSE:LYG), with 5.75 million shares worth $13.8 million.
Here is what Oakmark Funds has to say about Lloyds Banking Group plc (NYSE:LYG) in its Q3 2021 investor letter:
“Lloyds’ great return is partly the result of its exceptionally low starting price. Nevertheless, company fundamentals have also improved in part because of management’s conservative approach to reserving for loan losses as well as its decision at the beginning of the pandemic to suspend its program of returning excess capital to shareholders—a program it has since reinstated.”
8. Yamana Gold Inc. (NYSE:AUY)
Dividend Yield as of May 16: 2.41%
Price as of May 16: $4.99
Number of Hedge Fund Holders: 18
Yamana Gold Inc. (NYSE:AUY) is a Toronto-based precious metal producer, owning and developing gold and silver properties in the Americas, including Canada, Brazil, Chile, and Argentina. On April 27, the company declared a $0.03 per share quarterly dividend, in line with previous. The dividend is payable on July 14, to shareholders of record on June 30. Yamana Gold Inc. (NYSE:AUY) delivers a dividend yield of 2.41% as of May 16.
On April 21, Barclays analyst Matthew Murphy raised the price target on Yamana Gold Inc. (NYSE:AUY) to $6 from $5 and kept an Equal Weight rating on the shares. The analyst contended that while the surge in commodities has been beneficial for the resource equities, as growth normalizes and supply challenges continue, investors need to consider the likelihood of margin compression. “While a global recession appears unlikely, there are multiple headwinds dragging on the growth outlook,” stated the analyst. He remains Overweight on select miners, with an inclination towards gold.
According to Insider Monkey’s fourth quarter database, Yamana Gold Inc. (NYSE:AUY) was found in the public stock portfolios of 18 hedge funds, up from 15 funds in the last quarter. In the first fiscal quarter of 2022, John Overdeck and David Siegel’s Two Sigma Advisors reported owning a position worth $111.65 million in the company.
7. Mizuho Financial Group, Inc. (NYSE:MFG)
Dividend Yield as of May 16: 6.08%
Price as of May 16: $2.29
Number of Hedge Fund Holders: 7
Mizuho Financial Group, Inc. (NYSE:MFG) was founded in 2003 and is headquartered in Tokyo, Japan. The financial services corporation operates through five segments – Retail & Business Banking Company, Corporate & Institutional Company, Global Corporate Company, Global Markets Company, and Asset Management Company. Mizuho Financial Group, Inc. (NYSE:MFG) serves customers in Japan, the Americas, Europe, Asia, Oceania, and internationally.
On May 13, Mizuho Financial Group, Inc. (NYSE:MFG) posted FY GAAP earnings per share of ¥209.26. Revenue for the period grew 23.1% year-over-year to ¥3963.09 billion. According to its FY 2022 guidance, the company estimates ordinary profits to be ¥770 billion.
Goldman Sachs analyst Makoto Kuroda initiated coverage of Mizuho Financial Group, Inc. (NYSE:MFG) with a Neutral rating and a 1,870 yen price target on April 27. The analyst said the slowdown in the bank’s recent double-digit growth momentum is already priced in the shares, but he prefers to wait to hear for the growth strategy update in the upcoming results meeting.
Insider Monkey’s Q4 database suggests that 7 hedge funds were long Mizuho Financial Group, Inc. (NYSE:MFG), compared to 6 funds in the last quarter. Nicholas Bagnall’s Te Ahumairangi Investment Management is one of the leading shareholders of the company as of Q1 2022, with 737,784 shares worth $1.8 million.
6. National CineMedia, Inc. (NASDAQ:NCMI)
Dividend Yield as of May 16: 8.28%
Price as of May 16: $1.45
Number of Hedge Fund Holders: 14
National CineMedia, Inc. (NASDAQ:NCMI) is a Colorado-based company that operates cinema advertising networks in North America. The company is also engaged in online and mobile advertising. National CineMedia, Inc. (NASDAQ:NCMI)’s dividend yield on May 16 came in at 8.28%. Priced at $1.45, it is one of the top penny stocks that pay dividends. The company’s Q1 revenue of $35.9 million gained notably as compared to the $5.4 million revenue in the same period last year, beating consensus estimates by $2.45 million.
On March 15, National CineMedia, Inc. (NASDAQ:NCMI) declared a $0.05 per share quarterly dividend, in line with previous. The dividend was distributed to shareholders on March 31, to shareholders of the company as of March 17.
Riley analyst Eric Wold on May 10 maintained a Buy rating on National CineMedia, Inc. (NASDAQ:NCMI) but lowered the price target on the shares to $4 from $5. The analyst noted that National CineMedia, Inc. (NASDAQ:NCMI)’s Q1 results were mixed, and stronger attendance during the quarter was not efficiently monetized due to a tough scatter ad market. However, the analyst remains confident in the underlying recovery of demand for theater and the opportunity for National CineMedia, Inc. (NASDAQ:NCMI) to benefit from shifting ad budgets.
According to Insider Monkey’s database of elite funds, National CineMedia, Inc. (NASDAQ:NCMI) was found in the public stock portfolios of 14 hedge funds at the end of the fourth quarter of 2021. In Q1 2022, Aaron Weitman’s CastleKnight Management held a $1.17 million stake in National CineMedia, Inc. (NASDAQ:NCMI), making it a notable shareholder of the company.
Like Johnson & Johnson (NYSE:JNJ), The Coca-Cola Company (NYSE:KO), and Altria Group, Inc. (NYSE:MO), National CineMedia, Inc. (NASDAQ:NCMI) is a significant dividend stock to watch.
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Disclosure: None. 10 Penny Stocks that Pay Dividends is originally published on Insider Monkey.
