2 penny stocks (including a 5.2% dividend yield) to buy after recent falls!

Could this UK dividend stock be one of the best penny stocks to buy today? Here’s why I’d buy it alongside this top hydrogen stock.

| More on:

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.

A person holding onto a fan of twenty pound notes

Image source: Getty Images.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

I’m searching for the best penny stocks to buy following recent share price falls. Here are two top low-cost shares on my radar right now.

AFC Energy

Fuel cell producer AFC Energy (LSE: AFC) has been steadily rising in recent months. But it remains a good 20% cheaper than it was at the beginning of 2022.

I think this represents a great dip-buying opportunity. I think the ‘green’ hydrogen fuel cells it manufactures could prove essential in helping governments to hit their net zero targets.

On the downside, the high cost of green hydrogen means that its commercial viability is yet to be proven. This leaves a big question mark over AFC Energy’s investment case.

However, if I’m brave enough to invest, I believe this penny stock could be a highly-lucrative buy. Demand for renewable energy is soaring as the fight against climate change intensifies. And green hydrogen — which unlike other types isn’t produced with the use of fossil fuels — is the cleanest out there.

Bursting with energy

I’m particularly encouraged by reports that the UK government is set to double its hydrogen production targets later this week. It’s thought that up to 5GW of green hydrogen in particular is being targeted by 2030.

I think interest in this low-carbon source could be about to ignite elsewhere too. And AFC Energy — which is showcasing its tech in the high-profile Extreme E racing series — could be a big winner.

Centamin

Gold stock Centamin’s (LSE: CEY) share price has cooled considerably during the past month. I believe its move back into penny stock territory represents another terrific dip-buying opportunity.

It’s my opinion that the precious metal it mines could rise rapidly in the months ahead as inflation takes off. Prices were already increasingly rapidly into the beginning of 2022. The worsening Covid-19 outbreak in China and the war in Ukraine have kept — and look set to keep — pushing inflation through the roof.

Rising prices are a natural inflator for gold demand. And resurgent physical gold sales at the US Mint illustrate how strongly interest in the safe-haven asset is improving. Some 155,550 ounces of its American Eagle coins were sold in March, up 74% month-on-month.

5.2% dividend yields!

I like gold stock Centamin in particular because of its solid all-round value. The Egypt-focused miner trades on an undemanding forward price-to-earnings (P/E) ratio of 12.9 times. It also sports a meaty 5.2% dividend yield.

There’s no guarantee that gold prices will go up, of course. Rapid central bank rate hikes to curb inflation, for example, and a subsequent lift in the US dollar could hit bullion values hard, and by extension profits at the likes of Centamin.

But on balance I think the outlook for gold prices is very bright. So I’d buy the metal producer to ride this theme.

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 assessed. Consider taking independent financial advice.

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

More on Investing Articles

Investing Articles

Could the JD Sports Fashion share price double in the next five years?

The JD Sports Fashion share price has nearly halved in the past five years. Our writer thinks a proven business…

Read more »

Bus waiting in front of the London Stock Exchange on a sunny day.
Investing Articles

If interest rate cuts are coming, I think these UK growth stocks could soar!

Falling interest could be great news for UK growth stocks, especially those that have been under the cosh recently. Paul…

Read more »

Investing Articles

Are these the best stocks to buy on the FTSE right now?

With the UK stock market on the way to hitting new highs, this Fool is considering which are the best…

Read more »

Petrochemical engineer working at night with digital tablet inside oil and gas refinery plant
Investing Articles

Can the Centrica dividend keep on growing?

Christopher Ruane considers some positive factors that might see continued growth in the Centrica dividend -- as well as some…

Read more »

Smiling family of four enjoying breakfast at sunrise while camping
Investing Articles

How I’d turn my £12,000 of savings into passive income of £1,275 a month

This Fool is considering a strategy that he believes can help him achieve a stable passive income stream with a…

Read more »

Person holding magnifying glass over important document, reading the small print
Investing Articles

2 top FTSE 250 investment trusts trading at attractive discounts!

This pair of discounted FTSE 250 trusts appear to be on sale right now. Here's why I'd scoop up their…

Read more »

Smiling young man sitting in cafe and checking messages, with his laptop in front of him.
Investing Articles

3 things that could push the Lloyds share price to 60p and beyond

The Lloyds share price has broken through 50p. Next step 60p? And then what? Here are some thoughts on what…

Read more »

Young female business analyst looking at a graph chart while working from home
Investing Articles

£1,000 in Rolls-Royce shares a year ago would be worth this much now

Rolls-Royce shares have posted one of the best stock market gains of the past 12 months. But what might the…

Read more »