I’m hunting for the best bargain shares to buy ahead of early April’s Stocks and Shares ISA deadline. Here are two top penny stocks I think offer unmissable value. Each trades on a forward price-to-earnings (P/E) ratio inside the high-value terrain of 10 times and below.
5.4% dividend yields!
There’s a danger that rising interest rates will hit new homes demand as affordability comes under pressure. However, I’m betting that the size of Britain’s colossal homes shortage means newbuild sales will remain very robust. The National Housing Association has estimated that England alone needs to build 340,000 properties every year to solve the problem.
This is why I’d buy penny stock Topps Tiles (LSE: TPT) today. I think it can expect sales of its products to remain strong as home construction steps up in the years ahead. A bright outlook for the repair, maintenance and improvement (or RMI) market also bodes well for this retail share.
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Indeed, B&Q owner Kingfisher announced this week that its sales in the UK and Ireland leapt 17% in the 12 months to January. This was thanks to “[the]renewed importance of the home, more working from home, and the development of a new generation of ‘DIY’ers’” following the outbreak of Covid-19, Kingfisher said. Importantly, it added that “we expect these broad trends to endure”, which bodes well for Topps Tiles.
Following recent share price weakness Topps Tiles trades on a rock-bottom P/E ratio of 9.4 times. The retailer sports a titanic 5.2% dividend yield as well. I think this kind of value is hard to ignore.
A penny stock for the inflationary crush
Much of the retail sector is coming under extreme pressure as inflation sprints northwards. Latest data from the Confederation of British Industry last week showed that retail sales in March have been “poor” for this time of year. And what’s more, retailers have warned that conditions are expected to remain tough next month too.
I think Card Factory (LSE: CARD) could thrive in this era of high inflation. People are unlikely to stop sending birthday cards and throwing parties as their spending power erodes. They are simply going to shop around to keep the celebrations going at a more affordable price. This means trading at this low-cost greeting cards chain may actually pick up.
That’s not to say Card Factory could have things all its own way however. Paper costs are soaring as shortages of the key material emerge. Furthermore, Card Factory is also facing a storm of rising labour, energy and logistics costs.
Still, it’s my opinion that these dangers could be offset by the opportunities Card Factory could have to grab sales from its more expensive rivals. And besides, at current prices, Card Factory offers very tempting value for money. Today, it trades on a forward P/E ratio of just 6.9 times.
