The recent sell-off in global stock markets has provided investors like me with an excellent opportunity to buy on dips. So far, the UK stock index has successfully avoided a total stock market crash. However, I think the trading prices of many high-quality British stocks may be too cheap to miss.
In recent months, the value of the following two penny stocks that pay dividends has plummeted.That’s why I will spend £1,000 on each Low-cost stocks immediately.
7.2% dividend yield
this Cactus (London Stock Exchange: CEY) The stock price was hit hard by the sharp drop in the price of gold. In the past 12 months, gold and silver prices have fallen by 7%.This is pulling FTSE 250 Index-Citing Centamin fell 41% during the same period. It is now trading within the low-priced stock range at 99 pence per share.
I think this gold miner is an excellent contrarian stock that can rebound today. Not only does it trade at a forward price-to-earnings (PEG) growth of 0.7, but Centamin’s dividend yield for 2020 is also as high as 7.2%.
This huge rate of return can help investors offset the problem of rising inflation and still obtain substantial real returns. In fact, the impact of rising inflation may help once again boost safe-haven assets such as gold and Centamin’s stock price. U.S. consumer price inflation rebounded to a recent 13-year high in September, at 5.4%. Wednesday data showBut remember, if the central bank tightens policy faster and more severely than expected in response to the threat of inflation, the price of gold may continue its downward trend.
You get what you pay
I believe too Three-point Social Housing Real Estate Investment Trust (London Stock Exchange: SOHO) Probably one of the best dividend-paying penny stocks to buy today. This UK share provides social housing for adults with specific long-term care requirements. It focuses on one of the more defensive parts of the real estate market, which means that even if the UK’s economic recovery cools, earnings should remain strong.
I like Triple Point for another reason. According to real estate investment trust (REIT) rules, companies are obliged to distribute at least 90% of their annual profits to investors in the form of dividends. Therefore, the forward dividend yield here is as high as 5.1%.
Triple Point’s share price has fallen 15% from its August record high to 98 pence. Therefore, its current price-to-earnings ratio (P/E) is only 14 times. Considering the flexible operation of penny stocks and excellent growth prospects, I think this valuation is not high.
Mencap, the learning disability charity, estimates that by 2027/28, the demand for professional support housing (or SSH) units will grow to 29,000 to 37,000. This is an increase from the 22,000 and 30,000 units 10 years ago.
I think Triple Point is a low-priced stock worth buying, even if construction delays and cost overruns may seriously damage profits. Rising raw material prices and shortages of construction products make this a particularly relevant hazard today.
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Royston Wild There is no position in any of the above-mentioned shares. The Motley Fool UK has no position in any of the aforementioned stocks. The views expressed by the companies mentioned in this article are those of the author and may therefore differ from the official recommendations we made in subscription services such as Share Advisor, Hidden Winners and Pro. At The Motley Fool, we believe that taking into account a variety of different insights, We are better investors.