Looking for the best penny stocks to consider buying? Here are two soaring UK shares I think are worth a closer look from ISA investors.
Alternative Income REIT
While most penny stocks are geared for growth, Alternative Income REIT‘s (LSE:AIRE) aim is to provide a reliable stream of dividends.
Like all real estate investment trusts (REITs), it’s designed to pay at least 90% of annual rental earnings to shareholders. This is in exchange for breaks on corporation tax.
As a result, the company’s forward dividend yield‘s an eye-popping 8.9%.
After a bumpy start to the year, Alternative Income’s bounced back and climbed more than 12% in the last two weeks. It’s risen as the Bank of England cut interest rates and signalled that several more could be coming. Lower rates boost REITs’ profits by lowering borrowing costs and supporting net asset values (NAVs).
I think this particular property giant could be worth considering because of its diversified model. The trust owns a portfolio of cyclical assets like hotels, retail parks and industrial units. Given the gloomy outlook for the UK economy, this leaves the door open for rent collection problems and occupancy issues.
Yet having said that, Alternative Income’s substantial exposure to defensive sectors (like gyms, power stations and residential property) means it exposes investors to far less risk than many other REITs.
At 73.2p per share, it trades at an 11% discount to its estimated NAV per share of 81.8p. This could leave room for additional impressive share price gains.
Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice.
Pan African Resources
At 41.2p per share, Pan African Resources‘ (LSE:PAF) share price is up 16% since the start of 2025. I think it could have much further to go as gold prices shoot through the roof.
After printing 40 new record highs last year, the yellow metal’s off to a flyer in 2025 and hit new peaks around $2,885 an ounce this week. A push through $3k seems inevitable, in my opinion, a key technical level that could itself prompt further price rises.
Of course there’s no guarantee that bullion prices will remain ascendant, adversely impacting profits at gold stocks like Pan African. A rising US dollar could pull the precious metal lower, as could resurgent demand for riskier assets from traders and investors.
But on balance, the outlook for safe-haven gold continues to glisten. Tension over US President Trump’s policies — from new tariffs that could stoke inflation, to discussions about invading Greenland and more recently Gaza — looks set to persist.
Other price drivers include strong central bank gold buying, worries over growth in key economies, and a new geopolitical world order.
Pan African Resources is one of my favourite gold stocks right now. With production also ramping up, City analysts expect earnings to soar 82% this financial year (to June), and another 43% the following year.
As a consequence, the miner trades on a forward price-to-earnings (P/E) ratio of just 6.7 times. This leaves plenty of scope for further price increases if gold, as I expect, keeps charging northwards.
