I think it is fair to say that most ASX penny stocks are speculative in nature and do not generate profits.
But that doesn't mean there aren't any out there that aren't profitable.
In fact, some are even profitable enough to reward their shareholders with dividends.
For example, two ASX penny stocks that analysts have named as buys and are tipping to offer attractive dividend yields are listed below.
Here's what you need to know about these shares that you can buy for less than a dollar:
GDI Property Group Ltd (ASX: GDI)
Bell Potter thinks that GDI Property could be an ASX penny stock to buy right now. It is a property owner and fund manager that is currently managing property investments in Greater Sydney, Brisbane, Perth, South East Queensland, and North Queensland.
Its shares are changing hands for 59 cents. This could be cheap according to the broker, which has a buy rating and 75 cents price target on them.
The broker's analysts highlight that "GDI offers a +10% 3yr EPS CAGR which is amongst the highest amongst our coverage while many other passive REITs are still facing CoD headwinds and declining earnings growth."
In respect to income, the broker is forecasting dividends per share of 5 cents across FY 2024, FY 2025, and FY 2026. Based on the current GDI Property share price of 58 cents, this implies dividend yields of 8.6% for the next three years.
SRG Global Ltd (ASX: SRG)
Another ASX penny stock that pays dividends is SRG Global. It is a diversified industrial services group that offers multidisciplinary construction, maintenance, production drilling and geotechnical services.
The company's shares are currently trading at 83 cents. Bell Potter thinks this makes SRG Global undervalued at current levels. In fact, it believes its penny stock status should come to an end in the near future. The broker currently has a buy rating and $1.30 price target on its shares.
It believes that "SRG's short-to-medium term outlook is reinforced by Government-stimulated construction activity in the Infrastructure and Non-Residential sectors and increased development and sustaining capital expenditures in the Resources industry."
As for dividends, Bell Potter is forecasting fully franked dividends of 4.7 cents in FY 2024 and then 6.7 cents in FY 2025. Based on its current share price, this will mean dividend yields of 5.65% and 8.1%, respectively.
