12 Best Dividend Penny Stocks to Buy According to Hedge Funds

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8. Banco Santander, S.A. (NYSE:SAN)

Stock Price: $6.03

Number of hedge fund holders: 15

Banco Santander, S.A. (NYSE:SAN) is one of the best bank penny stocks to buy according to hedge funds. Spain’s largest banking group offers a comprehensive range of services, including retail banking, corporate and investment banking, wealth management, insurance, and digital payment solutions. Banco Santander has solidified its position as a leading multinational financial institution with a significant presence across Europe, Latin America, North America, and  Asia.

In 2024, Banco Santander, S.A. (NYSE:SAN) reported a record net profit of €12.57 billion. This marks the third consecutive year of record earnings for the bank. This strong financial performance was driven by higher net interest and fee incomes, as the bank successfully capitalized on favorable market conditions. In response to its strong capital generation, the company announced a €10 billion share buyback program.

In February 2025, Banco Santander, S.A. (NYSE:SAN) launched its fully digital subsidiary, Openbank, in Mexico. This marks a significant step toward expanding its digital presence. In a broader strategy context, this is a step forward towards tapping into the growing Latin American market, as the bank plans to invest approximately $2.1 billion over the next three years to enhance technology and digital offerings in the region.

In a complex banking landscape, the rising interest rates, pose both opportunities and challenges for major players. The higher rates have bolstered net interest margins for banks, however, the economic uncertainties and potential recessions continue to pose risks to profitability. Investors are strongly advised to consider factors such as market share, economic conditions, and management quality when evaluating bank stocks due to the fluctuating markets. However, Banco Santander, S.A. (NYSE:SAN) has managed to win strong accolades recently also being listed as the highest-ranked European bank among Fortune’s 2025 World’s Most Admired Companies. The bank has been recognized by analysts for its strong market position and growth prospects.

In a nutshell, Banco Santander, S.A. (NYSE:SAN) presents a strong global presence to navigate the ever-fluctuating financial landscape. For investors seeking dividend-paying stocks with growth potential, the company presents a compelling opportunity, supported by its strong financial performance, a focus on enhancing shareholder value, and positive analyst endorsements.

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