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What Are the Best Penny Stocks for 2021?

Ruchi Gupta - Author

Dec. 1 2020, Published 8:31 a.m. ET

Are penny stocks worth your money and time in 2021? When investors talk about penny stocks, they mean stocks that trade under $5 apiece based on the SEC definition. Cheap stocks are often attractive to beginner investors with little money. 

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A starting investor could purchase thousands of penny stocks for the price of one power stock. For example, Amazon stock costs more than $3,000. Armed with $3,000 investment capital, you could buy 3,000 penny stocks trading under $1. 

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However, cheap stocks aren't without risks. Stocks under $5 are often associated with startup companies with unproven business models. Many associate penny stocks have businesses that struggle financially and face bankruptcy risk. Since penny stocks are often thinly traded, you may have a hard time selling them if you want to exit the investment.

What are the best penny stocks to buy in 2021?

People have made good money with cheap stocks that some investors won’t touch. For example, AMD, NIO, Monster Beverage, and Viatris used to be penny stocks. Successful turnaround stories continue to encourage investors. Putting money in the best penny stocks can make you rich over time.

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The secret to investing in the best penny stocks is to identify strong companies whose stocks may have tumbled because of temporary setbacks. For example, the COVID-19 economic crisis has created many penny stocks across various sectors. Many BEACH stocks are now in penny territory because of the COVID-19 pandemic.  

If you are seeking the best penny stocks to buy in 2021, consider companies that can recover from the COVID-19 pandemic and thrive. These companies include Arcos Dorados, Nokia, and AMC Entertainment. 

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What are the best penny stocks under $1?

Penny stock investors have different tastes. Some investors seek stocks under $5, while other investors pursue super cheap opportunities like stocks under $1. If you are hunting for the best penny stocks in 2021 for under $1, you may want to consider companies like Sundial Growers, Onconova Therapeutics, Ocugen, and Advaxis.

The other penny stocks under $1 that some investors may find attractive for a 2021 portfolio are CES Energy Solutions and Freeman Gold. CES Energy Solutions supplies critical chemicals to the oil and gas industry. Fuel demand should increase after COVID-19 vaccine distribution begins and people resume travel for business and leisure. Spiking fuel demand would increase drilling activities, which should generate more business for CES Energy Solutions.

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What are the best penny stocks with dividends?

Penny stocks with dividends are usually hard to come by and investors are always looking for them. Some of the penny stocks with dividend track records include clean energy company Whitecap Resources and telecom operator Veon. Headquartered in the Netherlands, Veon operates in 10 countries and has more than 200 million subscribers combined.

The best penny stocks on the NYSE and Nasdaq

Most penny stocks are traded over the counter. The NYSE and Nasdaq have rules that require companies to maintain a certain minimum stock price. A stock may be delisted from these national exchanges if it remains in the penny territory for too long. However, investors can still find many penny stocks on the NYSE and Nasdaq. 

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Some of the best penny stocks on the NYSE include Hexo, which trades under the ticker symbol "HEXO," and Kosmos Energy, which trades under the ticker symbol "KOS." The other under $5 stocks on the NYSE are Invesco Mortgage Capital, which trades under the ticker symbol "IVR," and MFA Financial, which trades under the ticker symbol "MFA."

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Besides Sundial Growers, Onconova Therapeutics, and Advaxis, the other hot penny stocks on Nasdaq include Jaguar Health and Adial Pharmaceuticals. The other under $5 stocks on Nasdaq are Tonix Pharmaceuticals and Catalyst Pharmaceuticals.

Best penny stocks to buy on Robinhood

Investors like the Robinhood platform because it allows them to buy and sell stocks and other securities for free. Also, Robinhood has a tool that enables investors to get in early on new IPO stocks

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Can you buy penny stocks on Robinhood? Yes, all of the NYSE and Nasdaq stocks under $5 all the way to under $1 are available on Robinhood. Some of the penny stocks that are popular on Robinhood right now are Nokia, AMC Entertainment, MFA Financial, and Catalyst Pharmaceuticals. The other popular stocks under $5 on Robinhood are Ideanomics, Invesco Mortgage Capital, Komos Energy, and OrganiGram.

In addition to offering a range of penny stocks on the NYSE and Nasdaq, Robinhood also allows investors to buy stocks under $5 through its fractional share purchase program. 


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