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a day ago
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An 8.3% yield! Is this under-the-radar penny stock worth the risk?
As the FTSE 100 nears record levels, yields fall, valuations stretch and quality income stocks become harder to find. But while large-cap shares dominate headlines, the lesser-travelled world of penny stocks could be harbouring some surprising income potential. Penny stocks are often disregarded due to their speculative nature. They can be illiquid, volatile and lack reliable financials. Many are small-cap growth stories without a history of profitability, let alone dividends. But amid the noise, there are a few gems that stand out as possible exceptions. One such company is Ultimate Products (LSE: ULTP). Ultimate sells everyday household items under well-known brand names such as Salter, Beldray and Kleeneze. The firm operates in a highly competitive segment but its niche in affordable kitchen and cleaning products has allowed it to build steady customer demand across the UK and Europe. What makes it worth considering in today's income-starved market is its generous 8.3% dividend yield. Unlike most penny shares, which pay no income at all, Ultimate has delivered eight consecutive years of payouts. The dividend appears sustainable too, with a payout ratio of 78%, suggesting enough earnings are being retained to keep the lights on. On valuation, the stock appears attractive. With a price-to-earnings (P/E) ratio of just 9.5 and a price-to-sales ratio of 0.44, it looks to be trading well below the market average. By comparison, many large-cap FTSE 100 names now look fully priced after a strong rally this year. Naturally, there are still some red flags investors shouldn't ignore. Despite its reliable dividends, the share price has climbed just 17% over the past five years. This underperformance is partly due to thin operating margins (4.67%) and strained cash flow, with just £1.6m in operating cash generated. In a low-margin retail environment, rising input costs or supply chain issues could easily eat into profits and threaten future payouts. There's also the ever-present issue of liquidity. The company's shares are lightly traded, and its £64m market-cap places it firmly in the micro-cap territory. That brings additional risk during market downturns, when small-caps tend to be hit hardest and recover last. For those depending on steady income, volatility like this can be unsettling. Risks aside, the stock could appeal to long-term investors seeking something other than the usual fare. With larger dividend payers offering yields closer to 5% today, an 8.3% yield from a profitable, dividend-paying penny stock sounds appealing — if you can stomach the risks. Overall, I think it's worth considering, but diversification remains crucial. Ultimate could help raise the average yield of a portfolio primarily made up of more stable but lower-yielding FTSE 100 shares. And by spreading investments across different sectors, company sizes and risk profiles, investors can mitigate the impact of any single stock underperforming or cutting its dividend. As always, these types of penny stocks won't go well with everyone's risk appetite. But in an environment where the big names are looking increasingly expensive, they might just offer a small corner of hidden value for those willing to look beneath the surface. The post An 8.3% yield! Is this under-the-radar penny stock worth the risk? appeared first on The Motley Fool UK. More reading 5 Stocks For Trying To Build Wealth After 50 One Top Growth Stock from the Motley Fool Mark Hartley 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. Motley Fool UK 2025 Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Yahoo
02-06-2025
- Business
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Invinity Energy Systems Leads The Charge In UK Penny Stocks
The UK market has been facing challenges recently, with the FTSE 100 index experiencing declines due to weak trade data from China, highlighting global economic uncertainties. Despite these broader market pressures, investors continue to seek opportunities in various segments of the stock market. Penny stocks, often seen as a niche investment area involving smaller or newer companies, can still offer growth potential when supported by strong financials and solid fundamentals. In this article, we explore three penny stocks that may present hidden value and long-term potential for investors looking beyond traditional blue-chip investments. Name Share Price Market Cap Financial Health Rating Croma Security Solutions Group (AIM:CSSG) £0.86 £11.84M ★★★★★★ Ultimate Products (LSE:ULTP) £0.758 £63.83M ★★★★★☆ LSL Property Services (LSE:LSL) £2.70 £278.42M ★★★★★☆ Helios Underwriting (AIM:HUW) £2.46 £178.21M ★★★★★☆ Foresight Group Holdings (LSE:FSG) £3.81 £428.96M ★★★★★★ Polar Capital Holdings (AIM:POLR) £4.24 £408.79M ★★★★★★ Stelrad Group (LSE:SRAD) £1.45 £184.66M ★★★★★☆ Cairn Homes (LSE:CRN) £1.842 £1.14B ★★★★★☆ Begbies Traynor Group (AIM:BEG) £0.974 £155.39M ★★★★★★ Van Elle Holdings (AIM:VANL) £0.395 £42.74M ★★★★★★ Click here to see the full list of 398 stocks from our UK Penny Stocks screener. Let's take a closer look at a couple of our picks from the screened companies. Simply Wall St Financial Health Rating: ★★★★★★ Overview: Invinity Energy Systems plc, with a market cap of £69.61 million, manufactures and sells vanadium flow batteries for energy storage needs across business, industry, and electrical networks. Operations: Invinity Energy Systems plc has not reported any specific revenue segments. Market Cap: £69.61M Invinity Energy Systems plc, with a market cap of £69.61 million, manufactures vanadium flow batteries and has recently reported sales of £5.02 million for 2024, down from £22.01 million the previous year, alongside a net loss of £22.8 million. Despite being unprofitable and experiencing increased losses over the past five years, Invinity remains debt-free and possesses strong short-term assets (£47.7M), exceeding its liabilities (£9.9M). Recent strategic partnerships aim to bolster its position in the UK energy storage market while ongoing product advancements like ENDURIUM reflect efforts to enhance efficiency and reduce costs amidst high share price volatility. Unlock comprehensive insights into our analysis of Invinity Energy Systems stock in this financial health report. Explore Invinity Energy Systems' analyst forecasts in our growth report. Simply Wall St Financial Health Rating: ★★★★☆☆ Overview: Next 15 Group plc, with a market cap of £277.04 million, operates through its subsidiaries to offer communications services across the United Kingdom, Europe, Africa, the United States, and the Asia Pacific. Operations: The company's revenue is derived from four key segments: Customer Engage (£340.56 million), Customer Insight (£73.87 million), Customer Delivery (£171.19 million), and Business Transformation (£144.19 million). Market Cap: £277.04M Next 15 Group plc, with a market cap of £277.04 million, reported revenues of £513.07 million for the year ending January 31, 2025. Despite experiencing negative earnings growth and a decrease in net income to £39.47 million from the previous year, the company's debt is well covered by operating cash flow and interest payments are well managed with EBIT coverage at 10.7 times. The board and management team are experienced, contributing to stable governance amid share price volatility. Recent executive changes include Samantha Wren's appointment as senior independent non-executive director effective June 2025. Click to explore a detailed breakdown of our findings in Next 15 Group's financial health report. Gain insights into Next 15 Group's future direction by reviewing our growth report. Simply Wall St Financial Health Rating: ★★★★☆☆ Overview: BATM Advanced Communications Ltd., with a market cap of £78.58 million, develops, produces, and supplies real-time technologies and associated services across Israel, the United States, and Europe. Operations: The company's revenue is primarily derived from its Diagnostics segment at $38.62 million, followed by Non-Core activities at $57.04 million, Cyber solutions at $13.13 million, and Networking services contributing $8.55 million. Market Cap: £78.58M BATM Advanced Communications Ltd., with a market cap of £78.58 million, faces challenges as it remains unprofitable, reporting a net loss of US$22.3 million for 2024 despite sales of US$117.34 million. The board and management are experienced, providing stability amid financial volatility. Recent developments include securing a US$1.5 million order for advanced encryption solutions addressing quantum computing risks and expanding its Edgility platform in Brazil through Telebras, enhancing its market presence and technological capabilities. The company maintains more cash than debt, though negative operating cash flow limits debt coverage effectiveness. Take a closer look at BATM Advanced Communications' potential here in our financial health report. Learn about BATM Advanced Communications' future growth trajectory here. Access the full spectrum of 398 UK Penny Stocks by clicking on this link. Contemplating Other Strategies? Diversify your portfolio with solid dividend payers offering reliable income streams to weather potential market turbulence. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include AIM:IES AIM:NFG and LSE:BVC. This article was originally published by Simply Wall St. Have feedback on this article? Concerned about the content? with us directly. Alternatively, email editorial-team@ Sign in to access your portfolio
Yahoo
28-05-2025
- Business
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Discovering UK Penny Stocks: Gulf Keystone Petroleum And 2 Other Promising Picks
The UK market has recently experienced a downturn, with the FTSE 100 index closing lower due to weak trade data from China, highlighting ongoing challenges in global economic recovery. Despite these broader market concerns, certain investment opportunities remain attractive, particularly in the realm of penny stocks. Although the term "penny stocks" may seem outdated, these smaller or newer companies often offer unique growth prospects at lower price points when supported by strong financials and solid fundamentals. Name Share Price Market Cap Financial Health Rating Croma Security Solutions Group (AIM:CSSG) £0.86 £11.84M ★★★★★★ Ultimate Products (LSE:ULTP) £0.762 £64.19M ★★★★★☆ LSL Property Services (LSE:LSL) £2.95 £304.2M ★★★★★☆ Integrated Diagnostics Holdings (LSE:IDHC) $0.35 $203.46M ★★★★★☆ Foresight Group Holdings (LSE:FSG) £3.80 £428.18M ★★★★★★ Polar Capital Holdings (AIM:POLR) £4.25 £409.75M ★★★★★★ Stelrad Group (LSE:SRAD) £1.42 £180.84M ★★★★★☆ Cairn Homes (LSE:CRN) £1.868 £1.16B ★★★★★☆ Begbies Traynor Group (AIM:BEG) £0.994 £158.58M ★★★★★★ Van Elle Holdings (AIM:VANL) £0.405 £43.82M ★★★★★★ Click here to see the full list of 404 stocks from our UK Penny Stocks screener. Here's a peek at a few of the choices from the screener. Simply Wall St Financial Health Rating: ★★★★★★ Overview: Gulf Keystone Petroleum Limited focuses on the exploration, development, and production of oil and gas in the Kurdistan Region of Iraq with a market cap of £337.07 million. Operations: The company generates revenue of $151.21 million from its oil and gas exploration and production activities. Market Cap: £337.07M Gulf Keystone Petroleum, with a market cap of £337.07 million, has recently achieved profitability and operates debt-free. Its short-term assets of $139 million comfortably cover both short-term and long-term liabilities. The company announced a $25 million interim dividend, marking its first semiannual distribution under the new framework, despite the dividend not being well-covered by earnings. Production guidance for 2025 remains steady at 40,000 to 45,000 barrels per day but is subject to local sales demand and operational adjustments. While Return on Equity is low at 1.4%, earnings are forecasted to grow significantly by over 59% annually. Click here and access our complete financial health analysis report to understand the dynamics of Gulf Keystone Petroleum. Learn about Gulf Keystone Petroleum's future growth trajectory here. Simply Wall St Financial Health Rating: ★★★★★★ Overview: Life Settlement Assets PLC is a closed-ended investment trust company that invests in and manages portfolios of life settlement policies primarily in the United States, with a market cap of $78.37 million. Operations: The company's revenue is derived from its life settlement portfolios, totaling $9.13 million. Market Cap: $78.37M Life Settlement Assets PLC, with a market cap of $78.37 million, operates without debt and has no long-term liabilities, providing financial stability. However, its recent earnings report shows a decline in revenue to $9.13 million from the previous year's $13.97 million, with net income dropping to $0.66 million from $4.3 million. The company's profit margins have also contracted significantly from 30.8% to 7.2%. Despite high-quality earnings and stable weekly volatility at 6%, the return on equity remains low at 0.7%, and earnings growth has been negative over the past year. Click to explore a detailed breakdown of our findings in Life Settlement Assets' financial health report. Explore historical data to track Life Settlement Assets' performance over time in our past results report. Simply Wall St Financial Health Rating: ★★★★★☆ Overview: LSL Property Services plc operates in the United Kingdom, offering business-to-business services to mortgage intermediaries and estate agent franchisees, as well as valuation services to lenders, with a market cap of £304.20 million. Operations: The company's revenue is primarily derived from three segments: Financial Services (£48.40 million), Surveying and Valuation (£97.82 million), and Estate Agency excluding Financial Services (£26.96 million). Market Cap: £304.2M LSL Property Services plc, with a market cap of £304.20 million, has demonstrated strong financial performance recently, reporting a significant earnings growth of 119.2% over the past year and achieving high-quality earnings. The company's net profit margins improved from 5.6% to 10.2%, and its return on equity stands at a robust 21.7%. Despite an increase in debt-to-equity ratio over five years, LSL's debt is well-covered by operating cash flow (88%), and it maintains more cash than total debt, indicating sound financial management. However, its dividend track record remains unstable despite affirming recent payouts. Jump into the full analysis health report here for a deeper understanding of LSL Property Services. Gain insights into LSL Property Services' outlook and expected performance with our report on the company's earnings estimates. Jump into our full catalog of 404 UK Penny Stocks here. Ready To Venture Into Other Investment Styles? Trump's oil boom is here — pipelines are primed to profit. Discover the 22 US stocks riding the wave. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include LSE:GKP LSE:LSAA and LSE:LSL. This article was originally published by Simply Wall St. Have feedback on this article? Concerned about the content? with us directly. Alternatively, email editorial-team@ Sign in to access your portfolio
Yahoo
26-05-2025
- Business
- Yahoo
UK's Top Penny Stocks To Watch In May 2025
The UK stock market has recently faced challenges, with the FTSE 100 index experiencing a downturn due to weak trade data from China, highlighting the interconnectedness of global economies. Amid these broader market fluctuations, investors often seek opportunities in less conventional areas such as penny stocks. Although considered an outdated term, penny stocks can still offer significant potential for growth when they possess strong financial foundations and sound business models. Name Share Price Market Cap Financial Health Rating Croma Security Solutions Group (AIM:CSSG) £0.86 £11.84M ★★★★★★ Ultimate Products (LSE:ULTP) £0.724 £60.99M ★★★★★☆ LSL Property Services (LSE:LSL) £2.85 £293.89M ★★★★★☆ Helios Underwriting (AIM:HUW) £2.20 £159.37M ★★★★★☆ Foresight Group Holdings (LSE:FSG) £3.74 £421.42M ★★★★★★ Polar Capital Holdings (AIM:POLR) £4.10 £395.29M ★★★★★★ FRP Advisory Group (AIM:FRP) £1.24 £306.06M ★★★★★☆ Stelrad Group (LSE:SRAD) £1.40 £178.29M ★★★★★☆ Begbies Traynor Group (AIM:BEG) £1.00 £159.53M ★★★★★★ Van Elle Holdings (AIM:VANL) £0.41 £44.36M ★★★★★★ Click here to see the full list of 404 stocks from our UK Penny Stocks screener. We'll examine a selection from our screener results. Simply Wall St Financial Health Rating: ★★★★☆☆ Overview: Anglo Asian Mining PLC, along with its subsidiaries, is involved in the exploration and production of mineral properties in Azerbaijan, with a market cap of £154.23 million. Operations: The company has not reported any specific revenue segments. Market Cap: £154.23M Anglo Asian Mining PLC, with a market cap of £154.23 million, recently reported a net loss of US$17.5 million for 2024 on sales of US$39.59 million, reflecting ongoing challenges in profitability. The company has initiated production from its Gilar underground mine, which is expected to significantly boost copper and gold output as it transitions towards becoming a mid-tier producer. Despite high volatility in share price and increased debt levels over the past five years, Anglo Asian's short-term assets exceed liabilities, providing some financial stability amidst its strategic expansion efforts in Azerbaijan's mining sector. Take a closer look at Anglo Asian Mining's potential here in our financial health report. Review our growth performance report to gain insights into Anglo Asian Mining's future. Simply Wall St Financial Health Rating: ★★★★★☆ Overview: Springfield Properties Plc, with a market cap of £116.04 million, operates in the United Kingdom as a house building company through its subsidiaries. Operations: The company's revenue is primarily derived from its Housing Building Activity, which generated £250.48 million. Market Cap: £116.04M Springfield Properties Plc, with a market cap of £116.04 million, has shown resilience despite challenges in the UK housing sector. Its earnings grew by 9.9% last year, outpacing industry averages and improving profit margins to 3.6%. The company's financial health is supported by short-term assets of £299 million exceeding both short- and long-term liabilities, while its debt level remains satisfactory with a net debt to equity ratio of 39.4%. Recent auditor changes indicate proactive governance as it navigates an anticipated earnings decline over the next three years amidst stable weekly volatility in share price movements. Get an in-depth perspective on Springfield Properties' performance by reading our balance sheet health report here. Understand Springfield Properties' earnings outlook by examining our growth report. Simply Wall St Financial Health Rating: ★★★★★☆ Overview: GSTechnologies Ltd., along with its subsidiaries, offers data infrastructure, storage, and technology services globally, with a market cap of £29.22 million. Operations: The company generates revenue of $3.53 million from its information data technology and infrastructure segment. Market Cap: £29.22M GSTechnologies Ltd., with a market cap of £29.22 million, operates in the data infrastructure and technology services sector, generating US$3.53 million in revenue. Despite being unprofitable and experiencing earnings declines over the past five years, GST maintains financial stability with short-term assets exceeding both short- and long-term liabilities, and more cash than total debt. The management team is experienced with an average tenure of 3.6 years, while shareholders have not faced significant dilution recently. However, the company's share price remains highly volatile compared to most UK stocks despite stable weekly volatility over the past year. Jump into the full analysis health report here for a deeper understanding of GSTechnologies. Review our historical performance report to gain insights into GSTechnologies' track record. Explore the 404 names from our UK Penny Stocks screener here. Ready For A Different Approach? The latest GPUs need a type of rare earth metal called Dysprosium and there are only 24 companies in the world exploring or producing it. Find the list for free. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include AIM:AAZ AIM:SPR and LSE:GST. This article was originally published by Simply Wall St. Have feedback on this article? Concerned about the content? with us directly. Alternatively, email editorial-team@ Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
03-05-2025
- Business
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Are these 3 heavily-discounted UK shares worth considering to buy in May?
UK shares in the FTSE 100 have been making a rapid recovery in recent weeks since the early April market sell-off. But not all British stocks have been holding up so well. There's quite a wide range of London-listed companies now trading near their 52-week low at valuations which, on the surface, are starting to look dirt cheap. For example, three that have caught my attention this month are Videndum (LSE:VID), Severfield (LSE:SFR), and Ultimate Products (LSE:ULTP). In terms of business models, all three of these UK shares are quite different from each other. Videndum specialises in hardware and software solutions for content creators, Severfield's focused on creating structural steelworks, while Ultimate Products sells a branded portfolio of homeware products. However, one common characteristic all these companies currently share is that their stock prices are in the gutter. And as a result, the forward price-to-earnings ratios are now looking quite attractive from a value investor perspective. So are these buying opportunities or value traps? Company 12-Month Share Price Performance Forward Price-to-Earnings Ratio Videndum -74% 9.3 Severfield -66% 2.2 Ultimate Products -64% 5.1 Before jumping headfirst into a new value investment, it's important to understand what's driving the stock price down. Looking at these enterprises, there are a few factors at play. However, the primary catalyst for each appears to be: A slower-than-expected rebound in the scripted TV markets following last year's strikes has caused Videndum's revenue to underperform, translating into profit warnings for shareholders Disruption within the construction industry has caused a number of Severfield's key projects to be delayed or outright cancelled, with seemingly no sign of improvement on the horizon A combination of weaker UK consumer spending paired with retailer inventory destocking headwinds has caused demand for Ultimate Product's offer to suffer while shipping costs continue to rise There seems to be a common theme here. All three businesses are experiencing a cyclical downturn of some sort. But buying during a downcycle can potentially be lucrative if the firms are able to bounce back. Not all of these UK shares, even at their seemingly cheap valuations today, are tempting me to buy right now. Severfield's the cheapest, according to the forward earnings multiple. But these projected earnings for 2026 include profits for projects that should have materialised in 2025. And with construction headwinds looking unlikely to turn any time soon, the group's downward journey might not yet be over. Videndum seems to be in a better spot, cyclically speaking, as the film & TV industry's recovering at a faster pace compared to the construction sector. Butthe co mpany's also tackling debt and liquidity issues that management's in the process of renegotiating. As for Ultimate Products, the firm appears to offer a stronger financial offer with operational cash flow more than able to cover interest expenses and dividends to shareholders. Operating in a highly competitive industry does give me pause. However, its leading brands, such as Russell Hobbs, Salter, and Dreamtime, definitely give it a competitive edge. With that in mind, value investors looking for cheap UK shares today might want to investigate Ultimate Products a bit more deeply. The post Are these 3 heavily-discounted UK shares worth considering to buy in May? appeared first on The Motley Fool UK. More reading 5 Stocks For Trying To Build Wealth After 50 One Top Growth Stock from the Motley Fool Zaven Boyrazian 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. Motley Fool UK 2025 Sign in to access your portfolio
