2 great penny stocks to buy right now!

I think penny stocks are an attractive way to try and make long-term returns in my portfolio. Here are two brilliant low-cost shares on my radar.

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I’ve been looking for the best penny stocks to buy, and here are two that I’m thinking of adding to my portfolio today.

Toasting a recovery stock

Revenues are bouncing back encouragingly at Marston’s (LSE: MARS) following the shock of Covid-19 lockdowns. Like-for-like sales were up 1.3% in the eight weeks to 27 November, latest financials showed. I expect trading momentum to steadily pick up too as concerns over the pandemic recede.

Don’t think that Marston’s is just a great buy for the post-pandemic rebound, though. As a long-term investor, I’m encouraged by data showing that Brits have been spending a greater proportion of their salaries on eating and drinking out in recent years. It’s a trend that recent studies suggest remains very healthy.

My main concern for Marston’s looking ahead is the prospect of soaring beverage costs. Beer giant Heineken has just warned that prices for its fizzy product could rise to reflect a 15% rise in costs. Pub operators will either have to absorb this higher cost and watch margins come under pressure, or they’ll pass these increases onto the customer and risk a revenues slump.

Too cheap for me to miss?

That being said, at current prices, I still think Marston’s shares could be too cheap for me to miss. The business is expected to bounce back into profits in this financial year (to September 2022). This leaves the penny stock trading on a forward price-to-earnings ratio of 10.8 times.

I’d also buy Marston’s because its dividends could be about to explode again. Marston’s paid dividends well above the market average before Covid-19 forced it to cease shareholder payments altogether. And City analysts anticipate that the company’s expected return to profit this year will also result in an immediate return to dividend payments.

A 0.7p per share dividend is forecast for financial 2022, resulting in a modest 0.8% yield. The expected yield leaps to 2.3% for next year, though, thanks to a predicted 1.9p dividend. Like all forecasts, these could change based on future developments and are not something to rely on. But I think Marston’s could prove a great buy to add potentially strong earnings and dividend growth to my portfolio.

A penny stock for the strong jobs market

Staffline Group (LSE: STAF) might not have things all its own way if the domestic economy really starts to struggle. But right now the penny stock — which provides recruitment and training services to business — is doing a roaring trade thanks to the buoyant jobs market. Full-year gross profits at Staffline rose 11% in 2021.

Latest signals show that job hunting activity in Britain continues to strengthen, too. New data from Ipsos shows that almost half of all workers have searched for new employment in the past three months. The cost of living crisis suggests that the number could keep climbing as well as people seek better pay.

Fellow recruiter Hays saw like-for-like fees in the UK and Ireland leap 33% between October and December. And permanent hirings here rose 69%, illustrating the strength of business confidence recently. This gives me confidence that Staffline could continue to deliver meaty profits growth. It’s one of several top growth stocks I’m considering buying today.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be considered so you should consider taking independent financial advice.

Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended Marstons. 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.

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