12 Best Dividend Penny Stocks to Buy According to Hedge Funds

2. Berry Corporation (NASDAQ:BRY)

Stock Price: $4.27

Number of hedge fund holders: 22

Independent upstream energy company, Berry Corporation (NASDAQ:BRY) engages in the development and production of conventional oil reserves in the western United States, with a significant focus on California. The company operates through two main segments: Exploration and Production (E&P), focusing on onshore oil and gas reserves, and Well Servicing and Abandonment, providing essential services to the energy sector.

Berry Corporation (NASDAQ:BRY) has undertaken significant financial restructuring to enhance its liquidity and extend debt maturities. The company has successfully completed a comprehensive refinancing of its existing indebtedness in 2024, securing a $450 million Term Loan Credit Agreement and a $500 million revolving loan facility. The strategic move bolstered the company’s financial flexibility, providing over $100 million in liquidity at closing.

The energy sector has increasingly been under scrutiny by regulators, fueling market uncertainties. The sector has seen increased fluctuations in commodity pricing, making it difficult for market players to navigate in an uncertain environment. Despite the challenges,  Berry Corporation (NASDAQ:BRY) has had a focus on low-geologic-risk, long-lived conventional oil assets, which has allowed it to be resilient. The focus on conventional oil assets in established regions may provide a degree of insulation against market volatility.

From an investment standpoint, Berry Corporation (NASDAQ:BRY) has attracted attention as a strong dividend-paying stock. The company offers a forward dividend of $0.58 per share as of February 2025. Its strategic emphasis on maintaining strong liquidity and generating free cash flow shows the potential to capitalize on potential market upswings. Investors considering exposure to the oil and gas sector may find Berry Corporation a compelling option. As a value stock, it offers both – access to the energy market and stability through shareholder-friendly policies. While the stock has faced some headwinds, dipping approximately 20% over the past year, recent positive movements and a strong dividend yield suggest potential for future growth and income generation.