The Motley Fool

5 penny stocks to buy right now

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Stack of one pound coins falling over
Image source: Getty Images

When I am looking for penny stocks to buy, I like to focus on the companies that I believe are stable, long-term investments. 

This is harder than it might seem. However, I believe that by focusing on property stocks, I can improve my odds of success. Indeed, property is relatively simple to understand, and there will always be a need for houses, shops, and offices.

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the coronavirus pandemic… and with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

We’re sharing the names in a special FREE investing report that you can download today. And if you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio.

Click here to claim your free copy now!

As such, here are five penny stocks in the property sector I would acquire for my portfolio today

Penny stocks on offer

The first company on my list is the PRS REIT. Specialising in buy-to-let property, this equity presents a straightforward way for me to buy exposure to rental property without managing any buildings myself.

The real estate investment trust increased its portfolio of properties by 91% last year to 4,291 homes with an estimated rental value of £41m a year. More properties are in the pipeline suggesting the portfolio will expand further over the next year or so. 

The stock currently offers a dividend yield of 4%. 

Civitas Social Housing is dedicated to investing in social care housing and healthcare facilities. This is another highly specialist and defensive market. The stock currently offers a dividend yield of 5.8%, and it is backed by rents from social housing. 

Throughout the pandemic, the company has collected the majority of rents on its properties, unlike other landlords. I think this stands testament to the group’s defensive qualities. It is also looking to grow, having completed the acquisition of 25 supported living properties so far this year.

Diversified portfolios

Custodian REIT owns a well-diversified portfolio of properties across the UK. This includes commercial, industrial, and retail properties. I think it is an excellent way to build exposure to the property market without having to have too much of an opinion on one sector or another. At the time of writing, the shares support a dividend yield of 5.5%. 

Regional REIT owns a portfolio of office properties mainly located outside the M25. The corporation focuses on acquiring assets other managers might be overlooking. As such, it can earn a higher return than the other companies profiled in this piece. It currently supports a dividend yield of 7.1%. 

And finally, I would buy Capital & Regional. This is a recovery play. Its portfolio of retail assets suffered a significant reduction in value during the pandemic. The level of rent collection also collapsed. Now the group is on the road to recovery, rent collection levels are improving, and management is reducing debt. 

I think all of the penny stocks outlined above have attractive qualities, but I cannot ignore the risks they also face. As we advance, they may have to overcome challenges such as higher interest rates, increasing the cost of debt, and reducing profit margins. Higher interest rates may also lead to reduced property values, which would impact the underlying value of their portfolio assets. 

One FTSE “Snowball Stock” With Runaway Revenues

Looking for new share ideas?

Grab this FREE report now.

Inside, you discover one FTSE company with a runaway snowball of profits.

From 2015-2019…

  • Revenues increased 38.6%.
  • Its net income went up 19.7 times!
  • Since 2012, revenues from regular users have almost DOUBLED

The opportunity here really is astounding.

In fact, one of its own board members recently snapped up 25,000 shares using their own money...

So why sit on the side lines a minute longer?

You could have the full details on this company right now.

Grab your free report – while it’s online.

Rupert Hargreaves owns shares in Regional REIT. The Motley Fool UK has recommended Custodian REIT. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Our 6 'Best Buys Now' Shares

Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply click below to discover how you can take advantage of this.