I think these two penny stocks could deliver gigantic shareholder returns over the next decade. Here’s why I’m thinking of buying them for my portfolio today.
Healthcare hero
Buying certain UK-focused healthcare stocks like Totally (LSE: TLY) could be considered risky on one hand. The fast-changing political landscape creates uncertainty over what future levels of NHS funding will look like.
This particular penny stock provides a range of medical services. These include urgent care services alongside the NHS such as the 111 emergency phoneline and operating out-of-hours doctor surgeries.
However, I think Totally has a very bright future. Britain’s population is rapidly ageing and so demand for its services should steadily rise over the long term.
I also think the company’s essential operations make it a highly attractive share to buy today. Healthcare is one sector in which spending remains stable at all points of the economic cycle.
Totally awesome
The business also stands to gain from growing NHS hospital waiting lists (which hit new record highs of 6.5m last month). In this climate it can expect the nation’s free healthcare service to continue contracting out lots of work.
What’s more, Totally’s March acquisition of Pioneer Health Services will boost its chances of winning more of this business. The penny stock bought the specialist NHS secondary care services provider for £13m earlier this year.
City analysts think Totally’s earnings will rise 62% in this financial year ending March 2023. This leaves the company trading on a forward price-to-earnings growth (PEG) ratio of just 0.2. A reading below 1 suggests a share could be undervalued.
Making money with uranium
Berkeley Energia (LSE: BKY), by comparison, is a penny stock that’s not expected to make profits any time soon.
This creates extra risk for investors. Firms in this position can be forced to tap shareholders for cash if they get into difficulties. They can also take on more debt to fund their activities.
Still, Berkeley is a mining share that’s packed with investment potential. The business owns and operates Spain’s giant Salamanca uranium project. This is a project which could produce 4.4m pounds of the radioactive element a year when production begins.
A top power play
Companies like Berkeley Energia will play a crucial role in helping countries reduce their carbon emissions.
Lawmakers across the continent are stepping up plans to extend the life of existing reactors, and/or to build new facilities to reduce their use of oil and gas. Their appetite has been intensified by Russia’s invasion of Ukraine and the uncertainty this creates for energy supplies too.
News from the European Parliament last week has boosted the outlook for Berkeley even further. This is because lawmakers have agreed that nuclear investments can be labelled as sustainable energy sources. This is significant as it could unlock billions of extra pounds to bolster the growth of the nuclear industry.