7 Best Penny Stock Canada Reviews in 2024 | Full Guide to Benefits and Risks Involved

January 22, 2024 | Editorial Team

Canadian investors might focus on investing in a single or more trading strategy. Some are aggressive, while others prefer to take a longer-term view of the market and wait for good entry points. The key is finding an approach that works best for you. We look back on some of our successful penny stock Canada picks from last year.

We’ve compiled a list of penny stocks with strong fundamentals and solid growth prospects. These companies offer investors great opportunities to make money by investing small amounts of capital (see small-cap stocks). If you want more information about any of these stocks or would like us to cover another potential company, let us know.

What Is Penny Stock Canada?

Penny Stock Canada is a small-cap in an unlisted company that trades under one dollar. Some traders prefer companies that sell penny stocks for less than 5 dollars. Most of these companies are small in market capitalization. Many investors believe that penny stocks are risky (not as risky as day trade though). That’s why they choose to stay away from them. Others aren’t familiar with the concept. Either way, penny stocks remain misunderstood.

Penny Stock Canada is sold at an affordable price giving shareholders more reasons to hold onto their shares. The price tags range between $0.01 and $10 per share. In addition, many penny stocks pay regular dividends. Many investors also like the fact that they can sell their holdings whenever they wish. 

This is especially true for penny stocks since they don’t pay any dividends. Although some penny stocks pay dividends to investors, if you invest in a dividend-paying penny stock portfolio their are high chances of risks. Investors shouldn’t overlook other important aspects of penny stocks. Some of these include:

• High Returns

• Lower Risk Of Losses

• No Minimum Investment Amounts

What Are the Best Penny Stocks in Canada?

In this article, we look into how these stocks perform over time. Some have been around for years, while others are still new. But all share one thing in common. That is, they could generate significant returns for their shareholders. These stocks can outperform even the large Canadian stocks (see top stocks in Canada to buy now).

This list includes some great companies with penny stocks that will be profitable over time – check out other top Canadian stocks for long-term dividend yields.  They all offer solid dividends as well as strong growth potential. These are picks for the top penny stock companies in Canada while on the opposite end there are top blue-chip companies we discussed earlier.

1. Montreal-based 5N Plus Inc

This company has been around since 2000 when it first started offering its products online. It offers everything from smartphones to solar cells for satellites. It also provides purified metals (see top Canadian nickel stocks review), medical imaging detectors, and inorganic chemicals.

5nplus shares trade under the symbol “VNP” on the TSX Venture Exchange. The prices of 5N Plus ranged from $1.01 to $4.80 per share during the last year.

2. American Lithium Corp

American Lithium company operates lithium projects across North America and globally. It is a development and exploration company based in Vancouver, British Columbia, Canada, that has been around since 1974.

Recently, the Corp acquired real estate in Nevada. It is also establishing an exploration and development project there. American Lithium Corp trades under the LI symbol on the Toronto Stock Exchange Venture. Its shares ranged between 0.14 and 4.21 dollars within the last year.

3. CloudMD Software & Services Inc

Cloud MD Software & Services Inc. develops cloud computing technology platforms used by healthcare organizations worldwide. Its uses artificial intelligence (AI). AI helps doctors manage their patients’ records more.

stock exchange panel board

CloudMD Software & Services Inc. was founded in 2013 and is currently headquartered in Vancouver, Canada. The company trades under the symbol DOC on the Toronto Stock Exchange market. Their stock price share in the last 12 months varies between $0.54 and $3.43.

4. Drone Delivery Canada Ltd

Dronedeliverycanada.com is a Canadian drone delivery service provider. It delivers packages via drones at speeds of up to 120km per hour.

DronesDeliveryCanada.com has been around since 2014 based in Vaughan, Ontario, Canada. The company trades under the FLT symbol on the TSX Venture Exchange Market. In the past 12 months, the share prices have varied between $0.50 and $2.55.

5. Exro Technologies Inc

Exro Technologies specializes in providing high-quality power electronics solutions to customers. It focuses on electric motors, batteries, generators, etc.

ExroTechnologiesInc. was incorporated in 2014 based in Calgary, Alberta, Canada. The company traded under the EXRO symbol on the TSX Venture market. In the last 12 months, the share price ranged between $1.22 and $7.55.

6. Good Natured Products Inc

GoodNaturedProducts.com sells eco-friendly options made from plants not petroleum. GoodNaturedproducts has been around since 2010 and is based in Vancouver, Canada. For the past 12 months, stock trades from this industry ranged between $0.09 and $1.98.

7. Supreme Cannabis Company Inc

Supreme Cannabis Co. produces cannabis products for medical purposes. It’s one of the largest producers of legal marijuana in Canada.

Supreme CannabisCompanyInc. has been around since 1979 based in Toronto, Canada. They trade under the symbol FIRE on the TSX Venture marketplace. During the past 12 months, they have seen their share prices fluctuate between $0.12 and $0.60.

How Do Beginners Buy Penny Stocks?

For start-ups, buying penny stocks may seem like a daunting task. But with proper research and planning (see fundamental and technical analysis), anyone can become successful by investing in penny stocks. Beginners can buy Canadian Penny Stocks using one of three methods:

1) Buying through brokerage firms such as:

  • Fidelity Investments
  • Robinhood
  • TD Ameritrade
  • Charles Schwab
  • E*TRADE Financial

2) Using online trading platforms also ideal for day trading, such as:

  • InteractiveBrokers Group
  • Wealthsimple Trade
  • Questrade
  • Virtual Brokers
  • Qtrade
  • TD Direct Investing

3) Selling penny stocks via social media platforms such as:

  • Facebook
  • Bitcointalk
  • BitcoinTalk

Buyers should follow these tips before buying any penny stocks. They can help determine if the stock is worth investing in. Once you’ve found a suitable company, you’ll need to:

Tip 1 – Find Out Whether It’s Worth Investing In

A good rule of thumb is to choose whether to invest in penny stocks that pay dividends or ones with dividends. Stocks with dividends may be attractive in rocky stock market periods. Stocks at this period are tax-advantaged. Yet, you might also enjoy stocks that pay no dividends if they have low P/E ratios.

Tip 2 – Look At Diversification

When choosing between different penny stocks, diversify your portfolio. You can do this by spreading out your risk among various industries. For example, don’t buy all shares of a single sector. This could lead to losses due to poor performance. Instead, spread your bets around so that you won’t lose everything if one company goes bankrupt. If you decide to buy penny stocks, make sure that you understand what kind of risks you take.

Tip 3 – Check Its Financial Statements Before Buying Penny Stocks

Investors should check whether a third-party firm has audited a particular company. Audits ensure that the information provided about the company’s finances is accurate. Buyers should also verify that the company has filed documents with the Securities and Exchange Commission. You can visit the SEC site here. This is to ensure transparency. Finally, buyers should examine the company’s balance sheet and income statement.

Tip 4 – Finding a reputable broker

There are several brokers that offer penny stock trading services. The best way to choose which brokerage service or robo advisor is right for you is to look at reviews from other users.

Can You Buy And Sell Shares On Your Own?

Buying and selling penny stocks requires special skills. It takes time to master this skill set. Thus, it’s advisable to work with professionals who have experience trading penny stocks. They will help you avoid common mistakes.

Many investors believe that they cannot do anything without professional assistance. While this isn’t entirely untrue, you still need to take care of yourself financially. If you don’t seek professional assistance, you might lose money or get scammed by unscrupulous people.

Canada Penny Stocks: Can You Get Rich?

Investing in penny stocks requires patience. You don’t get rich overnight. If you invest wisely, you can make money from trading penny stocks. However, there are risks involved. These risks include:

  • Losing money due to bad trades
  • Getting scammed by dishonest brokers
  • Not knowing what to look out for, etc

Before you get started, learn how much risk you can handle. Find an investment plan that works for your situation. Finally, stick to your strategy.

The best thing about penny stock investments is that they offer high returns on investments. Don’t let emotions control your decisions. The main reason why people don’t want to buy penny stocks is that they’re afraid of losing their entire investments. Before you trade penny stocks in Canada, one should seek financial advice here.

Here are three tips to make sure you succeed in finding the right penny stocks to invest in.

Tip 1 – Find Out Which Companies Have Low P/E Ratios

Penny Stock investors should focus their attention on those companies whose earnings have grown over the past few years. A low P/E ratio means that these companies are growing at an average rate compared to the market. Investors who want to find hot penny stocks with high growth rates – we already discussed the less appealing growth rate of stocks from Power Corporation – need to search for companies with low P/Es.

Tip 2 – Look At Dividends

When searching for penny stocks, investors must keep one thing in mind — dividend payments! If a company pays no or little dividends, it is less likely to increase your investment value.

Tip 3 – Investing in Penny Stocks Requires Patience

You don’t get rich overnight. But, if you follow all the steps above, you will see some results within months. Good luck!

The Bottom Line

Before you buy any stock, make sure the companies listed have enough liquidity. If the companies lack liquidity, your investment will most likely go down. Check out the company’s website because they often list important information like earnings reports and other news releases. Look at the chart patterns of the stock over the past trades.

A lot of these things should give you an idea of whether the stock is undervalued or overpriced. Finally, read through their prospects carefully. There may be important disclosures that you need to understand before placing your trade. If you have any questions regarding penny stocks Canada, feel free to contact us.