Dividend-paying penny stocks are shares trading under $5 that also pay a dividend. They are rare, because most penny-stock companies are small or unprofitable and keep their cash. To find them with MarketXLS in Excel, load the "stocks under $5" list from Utilities > Useful Lists, then add =DividendYield("symbol") next to each ticker and filter for yields above zero. A dividend does not make a penny stock safe, so check earnings, cash flow, and payout ratio too. This article is from December 2020 and is educational, not investment advice.
Try it in your own spreadsheet
Get the free MarketXLS sample workbook (.xlsx).
No account needed. MarketXLS live data requires a paid plan. Preview workbook
Explore more videos
Dividends
The dividend is a token of gratitude from a company to its shareholders keeping in mind the time and risk factors involved with the money they have invested. Dividends can be monetary or in the form of shares. Dividends are paid from the company’s profits or reserves. However, a company is never obliged to pay dividends. Dividends are mostly given by stable companies with ensured profits in the future and it sends out a positive signal about the financial wellbeing of a company. Newly listed companies often tend to refrain from rolling out dividends to their shareholders as they incur losses at the initial stages of their operations.
Penny stocks
Penny stocks are generally defined as stocks trading below $5 per share, the threshold the U.S. Securities and Exchange Commission (SEC) uses. These stocks are issued by companies that are in their nascent stage and are looking to raise capital. Though some of these stocks are traded at big stock exchanges like the NYSE, most of them are traded on a special type of marketplace called the OTC (over-the-counter) markets.
Should you buy penny stocks?
Normally, investing in penny stocks is considered a very risky business because of high volatility, low liquidity, and uncertainty about the company’s future. An experienced investor would often refrain from putting his money in these stocks, however, the low prices can look appealing to a new investor. Penny stocks are not advisable but it’s not a bad idea either. One can always put a stop loss to limit his losses. Some small companies do grow into large ones, but most penny stocks do not. One of the parameters that an investor can look into is dividends. As mentioned in the first paragraph, it gives a good indication of a company’s future prospects. There are better indicators but dividends also help an investor to hedge against potential losses.
How marketXLS makes it easier
Looking for stocks based on your filters can always be tiresome and it is even tougher for penny stocks. You can always look it up on google but it will still take a lot of time to carry out a detailed analysis of stocks. With marketXLS you can do a thorough analysis of a company, be it financial statements or be it the ratios, that too on such a simple platform like MS Excel. One command and the whole data is in front of you. I will be showing you step by step, how it’s done.
Let’s first get the list of penny stocks.
Step 1: Click on the marketXLS tab.
** Step 2**: It will show a variety of options. Now, click on utilities. A dropdown will appear and then select useful lists.
** Step 3**: After clicking on useful lists, a new marketXLS window will where you need to select stocks under $5 to get the list of penny stocks.
The selected list loads the penny-stock symbols into your worksheet.
** Step 4**: Now that you have the list of all the penny stocks, it’s time to get the list of the ones that pay dividends. MarketXLS has a function to get the dividend yield of a company, DividendYield(“symbol”).
After using the function, you can compare the returned dividend yields for the companies in your worksheet.
Conclusion
Dividends alone cannot help you decide if a penny stock has potential. However, you can always dig deeper about a company with the help of marketXLS. You can import financial statements and ratios to carry out detailed analysis and take decisions accordingly.
Disclaimer
None of the content published on marketxls.com constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person.
The author is not offering any professional advice of any kind. The reader should consult a professional financial advisor to determine their suitability for any strategies discussed herein.
the article is written for helping users collect the required information from various sources deemed to be an authority in their content. The trademarks if any are the property of their owners and no representations are made.
References
Read more about dividends Corporate Finance Institute dividend guide.
Read more about penny stocks Investopedia penny-stock definition.
For company fundamentals, see the MarketXLS financial statements workflow.
