In this article, we discuss 10 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. 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. 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. 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., 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. as of the end of Q1 2022, with more than 32 million shares worth $147.20 million.
In addition to Johnson & Johnson, The Coca-Cola Company, and Altria Group, Inc., B2Gold Corp. 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. 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. 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. 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. serves customers in Japan, the Americas, Europe, Asia, Oceania, and internationally.
On May 13, Mizuho Financial Group, Inc. 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. 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., 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.’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. 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. but lowered the price target on the shares to $4 from $5. The analyst noted that National CineMedia, Inc.’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. to benefit from shifting ad budgets.
According to Insider Monkey’s database of elite funds, National CineMedia, Inc. 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., making it a notable shareholder of the company.
Like Johnson & Johnson, The Coca-Cola Company, and Altria Group, Inc., National CineMedia, Inc. is a significant dividend stock to watch.
5. Franklin Street Properties Corp. (NYSE:FSP)
Dividend Yield as of May 16: 7.90%
Price as of May 16: $4.55
Number of Hedge Fund Holders: 10
Franklin Street Properties Corp. (NYSE:FSP) is a real estate investment trust based in Wakefield, Massachusetts. The company focuses on value-oriented infill and central business district office properties in the U.S. Sunbelt and Mountain West. Franklin Street Properties Corp.’s dividend yield on May 16 stood at 7.90%.
On April 1, Franklin Street Properties Corp. declared a quarterly per share dividend of $0.09, in line with previous. The dividend was paid on May 5, for shareholders of record on April 15.
Riley analyst Craig Kucera on May 5 reiterated a Buy rating on Franklin Street Properties Corp. but lowered the firm’s price target on the shares to $6 from $6.50 after the Q1 results were published. The analyst cited office real estate investment trust multiple compression and a reduction to his net asset value estimate for the slashed price target.
Among the hedge funds tracked by Insider Monkey, 10 funds reported owning stakes in Franklin Street Properties Corp. at the end of December 2021, compared to 12 funds in the last quarter. In Q1 2022, Jim Simons’ Renaissance Technologies held a significant position in the company, with 1.6 million shares worth $9.6 billion.
4. Kinross Gold Corporation (NYSE:KGC)
Dividend Yield as of May 16: 2.79%
Price as of May 16: $4.30
Number of Hedge Fund Holders: 31
Kinross Gold Corporation (NYSE:KGC) is a Canadian gold and silver mining company that owns mining properties in the United States, the Russian Federation, Brazil, Chile, Ghana, and Mauritania. Kinross Gold Corporation’s dividend yield on May 16 came in at 2.79%.
On May 10, Kinross Gold Corporation declared a quarterly dividend of $0.03 per share, in line with previous. The dividend is distributable on June 16, to shareholders of the company as of June 2.
Kinross Gold Corporation reported earnings for the first quarter of 2022 on May 10, posting non-GAAP earnings per share of $0.06 and a revenue of $768 million. Kinross Gold Corporation’s cash and cash equivalents stood at $454.2 million, with total liquidity of approximately $1.7 billion as of March 31, 2022.
According to Insider Monkey’s Q4 data, 31 hedge funds placed long calls on Kinross Gold Corporation, with collective stakes valued at $365.6 million, compared to 27 funds in the earlier quarter, holding stakes in the company worth $321 million. In Q1 2022, Eric Sprott’s Sprott Asset Management was a significant shareholder of Kinross Gold Corporation, with 8.3 million shares amounting to $49.3 million.
3. Banco Bradesco S.A. (NYSE:BBD)
Dividend Yield as of May 16: 4.48%
Price as of May 16: $3.83
Number of Hedge Fund Holders: 12
Banco Bradesco S.A. (NYSE:BBD) is a Brazilian financial services company that offers banking and insurance products and services to individuals, corporations, and businesses. Banco Bradesco S.A. also deals in investment vehicles, pension products, real estate and automobile auctions, and foreign trade and exchange services.
Banco Bradesco S.A. reported on May 5 its Q1 2022 results. The company posted Q1 GAAP earnings per share of R$0.63. The recurring net income over the period came in at R$6.82 billion, up 4.6% year-over-year. The Q1 net interest income of R$17.06 billion also climbed 9.5% compared to the same period last year.
On May 2, Banco Bradesco S.A. declared a $0.003 per share monthly dividend, in line with previous. The dividend is distributable on June 8, to shareholders of the company at the close of business on May 4. Banco Bradesco S.A. delivers a dividend yield of 4.48% as of May 16. Priced at $3.83, it is a prominent penny stock to watch.
A total of 12 hedge funds were bullish on Banco Bradesco S.A. at the end of December 2021, compared to 13 in the prior quarter. Ken Fisher’s Fisher Asset Management is one of the leading shareholders of Banco Bradesco S.A. as of Q1 2022, with 23.4 million shares worth $108.6 million.
2. CorEnergy Infrastructure Trust, Inc. (NYSE:CORR)
Dividend Yield as of May 16: 7.94%
Price as of May 16: $2.52
Number of Hedge Fund Holders: 4
CorEnergy Infrastructure Trust, Inc. (NYSE:CORR) is a Kansas-based real estate investment trust that owns a portfolio of critical energy assets, including pipelines, storage terminals, and transmission and distribution assets. The REIT leases out these assets to industrial and commercial customers under long-term contracts.
On May 12, CorEnergy Infrastructure Trust, Inc. posted its Q1 revenue of $32.87 million, which increased 42.7% on a year-over-year basis. The stock rose 6.5% after Q1 adjusted EBITDA jumped from the prior quarter and year-over-year, and the company signed its first contract to offer transportation for a carbon sequestration project.
According to the fourth quarter database of Insider Monkey, 4 hedge funds were bullish on CorEnergy Infrastructure Trust, Inc., with collective stakes worth $727,000, compared to 3 funds in the earlier quarter, holding stakes in the company valued at more than $1 million. Lawrence Raiman’s LDR Capital held a significant share in CorEnergy Infrastructure Trust, Inc. at the end of Q1 2022, with 217,398 shares worth $4.15 million.
1. U.S. Energy Corp. (NASDAQ:USEG)
Dividend Yield as of May 16: 2.15%
Price as of May 16: $4.19
Number of Hedge Fund Holders: 3
U.S. Energy Corp. (NASDAQ:USEG) is an American independent energy company, developing and acquiring oil and natural gas properties in the continental United States. The company posted its Q1 results on May 12, announcing a revenue of $8.87 million, up 633.1% year-over-year.
On March 28, U.S. Energy Corp. declared a $0.0225 per share quarterly dividend. The dividend was paid to shareholders on May 2. U.S. Energy Corp.’s dividend yield on May 16 came in at 2.15%.
U.S. Energy Corp. announced on May 3 that it has acquired operational oil and gas producing properties in an all-cash transaction. The properties are based primarily in Liberty County, Texas, adjacent to its existing assets in the locality.
According to Insider Monkey’s Q4 data, 3 hedge funds were long U.S. Energy Corp., with combined stakes worth $235,000. In Q1 2022, Jim Simons’ Renaissance Technologies owned 385,290 shares of the company, worth $1.6 million.
You can also take a look at 10 Best Gas Stocks To Buy Now and 10 Blue Chip Stocks with Dividends.
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This article is originally published at Insider Monkey.
