12 Best Dividend Penny Stocks to Buy According to Hedge Funds

9. Gerdau S.A. (NYSE:GGB)

Stock Price: $2.89

Number of hedge fund holders: 14

As one of the largest steelmakers in the world and recognized as the largest producer of long steel in the Americas, Gerdau S.A. (NYSE:GGB) has operations in over 10 countries. The company serves diverse markets in multiple sectors like construction, industrial, and agricultural. It is also recognized for its focus on sustainability and recycling scrap constituting 73% of its steel production. GGB is among the best penny stocks that pay dividends.

The global structural steel industry has seen a significant increase in demand recently, driven by the rise in infrastructure developments. The industry is projected to reach a market size of $143 billion by 2025. This growth positions Gerdau S.A. (NYSE:GGB) favorably to increase its profitability. In Q4, 2024, the company reported a net income of 3 cents per share, with adjusted earnings reaching 6 cents per share. Together with the strong performance and plans for expansion, the company presents a strong outlook for the coming years.

From an investment point of view, Gerdau’s stock offers a compelling investment for dividend-focused investors. A forward annual dividend yield of 4.71%, reflects its commitment to delivering consistent shareholder returns.

Stepping into 2025, Gerdau S.A. (NYSE:GGB) has outlined plans to strengthen its position in key markets and explore new growth opportunities, while continuing to demonstrate operational efficiency. In an evolving global steel scenario, the company’s strategic initiatives and focus on creating a diversified portfolio position it well to capitalize on emerging opportunities. While the industry has been posed with significant challenges by way of fluctuating raw material prices and increased competition, the company has proved to be resilient through a strong financial performance. This proves that it is well prepared to tackle future industrial challenges through technological advancements, a strong market presence, and robust financials.

Considering these factors, Gerdau S.A. (NYSE:GGB) offers an interesting opportunity to investors seeking exposure to dividend-paying stocks in the industrial sector.