published on May 18, 2022
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What are Dividend Penny Stocks?
Dividend penny stocks are small cap stocks that pay dividends. Most penny stocks trading at a low price don't pay dividends because they can't afford dividend payments. Penny stocks are cheap for a reason, the companies behind these small caps are not doing well.
Should I Invest in Dividend Penny Stocks?
The majority of penny stocks go bankrupt in the long run. The odds of finding a penny stock that may eventually become a household name is low. For this reason, one should never invest in penny stocks in the long term even if they pay dividends.
When a stock is down 50% or more, the dividend payments are not going to make up for it. If one is interested in dividend payments, it is much safer to invest in a large company like Apple or Microsoft.
How to Trade Dividend Penny Stocks?
On the other hand, one can trade divided penny stocks and make money in the short term. Trading is different than investing as company fundamental is not a concern to swing traders or day traders who buy and sell stocks within a few minutes or a few days.
Dividend penny stocks do make big moves from time to time like any other stock. The question is can you buy them before the moves? Chances are, you cannot unless you know the CEO of the company.
Therefore, we penny stock traders relies on other tools such as technical analysis and chart patterns to make money from these low cap stocks.
To learn how to trade dividend penny stocks using technical analysis, read how to trade penny stocks.
Following are a few useful articles on penny stocks trading.
Best Penny Stock Chart Patterns
Support & Resistance in Penny Stocks Trading
Top Penny Stock Trading Mistakes
Top 10 Dividend Penny Stocks to Watch
Following are the top 10 dividend penny stocks to watch today.
- Unique Fabricating Inc (AMEX:UFAB)
- Jupai Holdings Ltd (NYSE:JP)
- Veon Ltd (NASDAQ:VEON)
- Highway Holdings Limited (NASDAQ:HIHO)
- Ngl Energy Partners LP (NYSE:NGL)
- Credit Suisse High Yield Bond Fund (ETF) (AMEX:DHY)
- Rydex 2x S&P Select Sector Financial ETF (NYSE:RFL)
- Enersis Chile S.A. ADR (NYSE:ENIC)
- Pingtan Marine (NASDAQ:PME)
- Invesco Mortgage Capital Inc (NYSE:IVR)
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