However, things aren’t quite as bright as they appear on the surface. The deteriorating economic landscape means that many of these high-yielding shares will in fact struggle to meet City dividend forecasts.

There are ways that investors can protect themselves, however. This includes finding stocks to buy whose operations remain highly profitable even when economic conditions deteriorate. Finding shares with cash-rich balance sheets and decent dividend cover is another way to avoid dividend disappointment.

2 dividend stocks to buy today

With this in mind, here are two high dividend stocks I’d happily invest my own cash in today.

#1: Topps Tiles

The forward dividend yield at Topps Tiles (LSE: TPT) sits at a market-beating 8%. Its declining share price also means the business trades on a rock-bottom P/E ratio of 6.2 times.

Topps’ share price has collapsed as investors worry about the impact of high inflation on the retailer’s sales. But, so far, the business has remained resilient to these pressures. Latest financials this month showed like-for-like sales up 2.9% in the 13 weeks to 2 July, in line with forecasts.

I’d buy the building products specialist to capitalise on the UK’s bright housing market. I expect sales of its products to remain strong as housebuilding picks up and DIY spending remains robust.

I’d also buy Topps Tiles because of the encouraging steps its taking to build market share. The business hopes to achieve a 20% share by 2025.

Let’s get back to this year’s projected dividend. At 3p per share, it is covered 2 times by predicted earnings, bang on the widely regarded security benchmark. Topps’ strong balance sheet also boosts its ability to pay big dividends (cash and cash equivalents stood at £13.4m as of April).

#2: Central Asia Metals

Like Topps Tiles, commodities producer Central Asia Metals (LSE: CAML) also offers excellent all-round value. As well as providing an 8.2% dividend yield, the firm trades on a P/E multiple of just 5.7 times.

Central Asia Metals is involved in copper, lead and zinc production in Kazakhstan and North Macedonia. And its share price has dropped sharply amid fears over the global economy and falling base metal prices.

I think this provides a great dip-buying opportunity though. I think the copper stock’s share price will rebound sharply when economic conditions recover. I’d also buy Central Asia Metals as demand for its metals from fast-growing industries like electric vehicles and renewable energy looks set to soar.

This year’s projected 18.7p per share dividend is covered 2.2 times by expected earnings. It has also seen a significant uptick in its balance sheet and enjoyed record free cash flow in 2021. I’d buy this high dividend stock today and look to hold it for years.

Real estate investment trust (REIT)

REITs are designed to yield income from properties designed and rented out for a specific purpose. Furthermore, they make excellent dividend stocks as they must return 90% of profits to shareholders as dividends. I own a number of REITs as part of my holdings.

Regional focuses on commercial properties in the UK. Its portfolio is made up of office buildings and industrial spaces located outside the M25 motorway.

As I write, Regional shares are trading for 73p. At this time last year, the stock was trading for 91p, which is a 19% drop over a 12-month period. Many stocks have pulled back due to macroeconomic headwinds as well as the events in Ukraine.

The pull back has made Regional shares look great value for money on a price-to-earnings ratio of 11. Its current dividend yield stands at just under 9%. It is worth noting the FTSE 100 average is 3%-4%.

All dividend stocks carry one common risk, that dividends are not guaranteed. They can be cancelled at any time at the discretion of the business. Furthermore, Regional may struggle to collect rents and lease buildings due to current macroeconomic issues such as soaring inflation as well as rising costs. These have placed pressures on businesses and they may look to cut costs, such as renting offices and industrial space.

I do believe Regional will continue to provide consistent and stable returns for me based on its track record as well as future growth prospects. I understand past performance is not a guarantee of the future, however. Infrastructure spending in the UK is booming, and the demand for office and industrial space should only increase in the longer term, benefitting Regional and shareholders like me.

Tiling retailer

Topps Tiles is one the UK’s largest tiling and flooring retailers. It currently has over 300 store locations throughout the UK as well as an online store.

As I write, Topps shares are trading for 39p. At this time last year, the stock was trading for 69p, which is a 43% drop over a 12-month period.

Like Regional, Topps’ recent share price decline has made the shares look great value for money on a price-to-earnings ratio of just seven. The shares current yield stands at just under 10%.

A short-term issue that Topps does face is the current rising costs and supply chain crisis. Rising costs could affect margins and in turn, performance and returns. Supply chain issues could affect operations, which could also have a material impact on performance and returns too.

Topps has a good track record of performance too. I believe it can continue to perform and grow returns as well. Part of this is linked to the current housing situation in the UK. There is a huge demand for homes that is outstripping supply. These new and renovated homes will need flooring and tiles and Topps has an excellent market presence that could help it boost performance and returns.

That said, I do think it’s always worth looking for hidden dividend diamonds from lower down the market spectrum. Here are three examples, all of which boast yields over 7%.

Regional REIT

Regional Real Estate Investment Trust (LSE: RGL) operates a 160-property portfolio, mostly offices in centres outside of the M25. The value of the entire estate now stands at £874m.

REITs are a great option for income seekers, in my view. In addition to offering a fuss-free way of investing in property, they also help to diversify a portfolio. Oh, and the dividend stream tends to be pretty good too.

As things stand, Regional is forecast to yield a stonking 8.9% in FY22! That’s not enough to beat inflation, but it’s a far better option for me than keeping cash in a bank account.

Risks here include the potential for lower demand for the company’s sites as working from home continues to be popular following the pandemic. Inflationary pressures could also see some existing tenants struggle to pay rent.

However, I like what I see here. I’d be willing to take a position in Regional.

Central Asia Metals

A lot of UK investors will hold shares in FTSE 100 miners for the sizeable yields they offer. However, at 8.8%, small-cap Central Asia Metals (LSE: CAML) is another dividend monster.

Sure, there’s no ‘free lunch’ here. Investing in the mining sector can be a rollercoaster ride, particularly as explorers and producers have no control over the price of the metals and minerals they dig for. The fact that Central Asia Metals is principally based in Kazakhstan might be enough to put some people off too.

On a more positive note, the demand for metals look set to soar in the years ahead as the transition to green energy continues to gather pace. As a low-cost producer of copper, zinc and lead (the latter two coming from its mine in North Macedonia), the £400m-cap could be ready to hit a purple patch. Again, I’d be comfortable buying this stock.

Topps Tiles

With a market capitalisation of under £90m, ceramic and porcelain tile distributor Topps Tiles (LSE: TPT) is approaching micro-cap status. The tendency for stocks this small to be pretty volatile might not suit all investors, but I think the potential 7.1% dividend yield on offer may make up for this.

What are the dangers here? Well, Topps Tiles could see sales drop if home construction/upgrades slow in the near term as a result of the recession. This might explain why the shares are down 30% in 2022, so far. There’s also quite a bit of debt on the balance sheet to ponder.

However, a forecast price-to-earnings (P/E) ratio of a little less than eight already looks pretty low to me. Unless analysts become seriously bearish, the aforementioned dividend should also be safely covered by profit. As long as I’m appropriately diversified elsewhere, I could be tempted to buy today.

Tiling and flooring

Topps Tiles is one of the UK’s best known and largest tiling and flooring retailers with over 50 years of experience under its belt. It has a network of over 300 locations throughout the country.

Topps operates via two store models. Its primary method of operating is what it calls ‘large edge-of-town store formats.’ This means it operates in larger premises away from town centres. In addition to this, it also operates a Topps Tile Boutique arm with smaller locations closer to high streets. Topps also trades directly to customers in its retail business and has a trade arm too.

A penny stock is one that trades for less than £1. As I write, Topps shares are trading for 55p. At this time last year, the shares were trading for 74p, which is a 23% decline over a 12-month period. Recent stock market volatility has placed further pressure on many stocks but has created some attractive buying opportunities.

A penny stock with risks

Topps could currently capitalise on the rising demand for construction projects and home improvement projects. The issues it faces are that of rising costs, the supply chain crisis and the possibility of slower demand. All of these factors could affect performance as well any returns I would look to make as a potential shareholder.

The rise of e-commerce and decline of the traditional high street experience has not been limited to fashion only. I remember buying new tiles for my kitchen online as I found a better price for the exact same product. Topps could suffer at the hand of online only competitors. These competitors don’t need to worry about costs such as rent and property maintenance that physical stores bring with them.

Why I bought this penny stock

Topps Tiles shares look dirt-cheap to me at current levels. The shares sport a price-to-earnings ratio of just 10. For a business with a long, distinguished track record as well as one eye on growth and the future, this is an enticing price.

In addition to this, Topps sports a dividend yield of over 5% as I write! This is higher than the FTSE 100 average of 3%-4%. As a passive income seeker, this was a big factor in my decision to buy the shares. I must note that dividends can be cancelled, however.

The construction and home improvement sectors are growing exponentially and demand for services linked to these sectors are only set to rise. This will benefit Topps Tiles. Topps’ most recent update in March was a two-part update which included Q2 results and an acquisition announcement of the purchase of Pro Tiler. A penny stock that is acquiring businesses that enhance its offering stands out for me. Q2 results were good as well with retail sales in Q2 growing by 18.2% on a two-year like-for-like basis and 45.6% on a one-year like-for-like basis.

I recently purchased a small number of shares in Topps Tiles. I believe it is an excellent quality penny stock with lots of potential for organic and acquisition-led growth. The fact it pays a dividend with a yield better than the FTSE 100 average is a big bonus for me and I plan to hold on to the shares for the long term.

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.

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.

Here are two great penny stocks I’m considering buying despite the rising near-term risks they face. I think they could be too cheap to miss following recent crashes.

Topps Tiles

I’d buy slumping Topps Tiles (LSE: TPT) as it carries attractive all-round value right now. As well as trading on a forward price-to-earnings (P/E) ratio of just 9.6 times, the retailer carries a chunky 5% dividend yield.

The home improvements phenomenon that took off during Covid-19 lockdowns in 2020 is yet to run out of steam. In the 12 months to September, a record 247,500 planning applications for home improvement and extension were made, latest figures show.

This suggests demand for Topps Tiles’ building products could remain strong in 2022. But this is not the only reason why I’m optimistic for the retailer. The homes market remains ultra-strong as low interest rates and government support for first-time buyers continues. And so sales of its flooring products to homebuilders should also stay lively as construction rates ramp up.

Topps Tiles could of course see sales slump as the cost of living crisis worsens. However, I think this is reflected in the company’s recent share price reversal and that rock-bottom earnings multiple.

The Restaurant Group

Leisure shares like The Restaurant Group (LSE: RTN) are also in danger from the rising cost of living. The strong revenues recovery following the end of Covid-19 lockdowns could run out of steam if people stay at home to save cash. What’s more, costs at the company’s restaurants could well balloon as commodities like wheat, sugar, cocoa and other essential foodstuffs rise in price.

That said, as a long-term investor I’m still thinking of buying The Restaurant Group shares today. The penny stock’s plunge to 14-month lows leaves it trading on a forward price-to-earnings growth (PEG) ratio of 0.1. This marginal reading is a long way inside the benchmark of 1 and below that suggests a company might be undervalued.

I like The Restaurant Group because of the strength of its brands like Frankie & Benny’s and Wagamama. The huge investment the penny stock has made to revitalise these brands has exceeded many people’s expectations (including my own). This is reflected by sales at group level outperforming those at other major restaurant chains in recent times.

I’d also buy The Restaurant Group as a way to capitalise on changing consumer priorities. What I mean by this is that Britons have been spending an increasingly large percentage of their incomes on experiences like dining out. This is a trend that’s recovering strongly in the post-pandemic environment as people strive to get out and about again.

The tragic war in Ukraine isn’t the only danger to stock markets either. Rising inflation threatens to hit consumer spending hard and push up business costs. It is also likely to prompt sustained interest rate hikes which will increase the cost of borrowing and damage demand for assets like stocks. Finally, a fresh flare-up of the pandemic would also likely drive UK share prices much lower.

2 penny stocks I’d buy today

In times of war the onset of market volatility takes second fiddle on the scale of importance. Still, I’m aware that people are worried about how choppiness on share markets could affect their wealth.

I plan to continue investing in UK shares. I don’t think I can’t afford not to if I want to build a decent financial nest egg for retirement. Here are two top penny stocks I’m thinking of buying today. I believe they could be too cheap to miss after recent price falls.

Assura

Britain’s rapidly-ageing population is putting increasing pressure on the State Pension. And this is, in turn, making it more and more important for me to secure my financial independence with UK shares. On the hand however, Assura (LSE: AGR) is penny stock that actually stands to benefit from this demographic change.

Assura — which has fallen 22% over the past 12 months — develops and then lets out primary healthcare facilities like GP surgeries. Demand for these sorts of properties are only going to grow as the country’s need for medical care increases.

Though it could suffer if government health policy changes, I’d use its recent fall to three-year lows as an opportunity to load up. Recent share price weakness means Assura now carries a mighty 4.9% dividend yield for this financial year.

Topps Tiles

A strong housing market also makes Topps Tiles (LSE: TPT) an attractive penny stock for me to buy. Strong homes demand is prompting housebuilders to supercharge construction rates and, by extension, their demand for building products is soaring. Sales of some materials are also rising for existing homeowners as they embark on some DIY before they put their property on the market.

I expect these phenomena to remain in tact too. Interest rates should remain lower than historical norms, in my opinion, which should continue supporting the housing market. I don’t think Topps Tiles’ recent share price performance reflects this likelihood.  The retailer is down 6% in value over the past year and this week dropped to two-week lows.

Of course, Topps Tiles could come under pressure if rising inflation hits consumer confidence. But it’s my opinion that this threat is baked into the company’s share price. It trades on a forward P/E ratio of 10.5 times. It also carries a 4.7% dividend yield today.

A great many low-cost stocks like these can also be considered less financially robust than larger-cap companies. This can significantly limit profits growth and even threaten a firm’s existence if trading conditions suddenly worsen.

However, these characteristics don’t apply to all penny stocks. But as a long-term investor, the prospect of temporary share price choppiness isn’t enough to put me off. Some quick research will allow me to avoid shares with weak balance sheets as well.

Here are three dirt-cheap penny stocks with big dividends I’m considering buying today.

Looking good

Lookers’ profit forecasts in 2022 could take a significant whack if chip shortages continue to damage new car production. But from a long-term perspective, I think the car dealership has a lot going for it. Worsening fears over the climate emergency means sales of electric vehicles (EVs) looks set for strong and sustained growth.

Don’t forget too that the government is set to phase out sales of new petrol and diesel cars in 2030. This could exacerbate interest in EVs towards the end of the decade. Today, Lookers trades on a forward P/E ratio of 7 times and boasts a chunky 4.2% dividend yield.

Topp of the world

Topps Tiles meanwhile deals on a bargain-basement P/E ratio of 10.8 times for this financial year. It carries a 4.8% dividend yield as well. I’d buy it because the British housing market should remain strong and so will wall and flooring product demand from homebuilders. Moreover, I’m tipping sales to keep rising amid a healthy repair, maintenance and improvement (RMI) market.

Topps Tiles’ latest financials showed sales up 1% in the 13 weeks to 1 January. This was despite the blockbuster comparatives a year earlier. Revenues were also up a mammoth 21% from the same 2019 period. I’d buy this penny stock even though runaway inflation could hit consumer confidence hard and, by extension, tile sales.

5.6% dividend yields

Speaking of inflation, I believe grabbing a slice of the gold market’s a good idea as costs soar. I’d do this by buying a UK bullion-producing stock rather than the metal (or a metal-backed financial instrument) as this way I can receive dividends while riding an increasing commodity price. Pan African Resources and its 5.6% dividend yield have caught my attention today.

There’s no guarantee that gold prices will rise, of course. Central bank interest rate hikes and a related rise in the US dollar could put paid to that. But the rate at which global inflation is booming — and importantly well beyond many broker forecasts too — suggests that profits at gold diggers like Pan African Resources could surprise to the upside. This penny stock trades on a forward P/E ratio of 5.5 times today.

Number 1 tile retailer in the UK

Topps Tiles is the UK’s number one tile retailer. It has a store network of over 300 locations throughout the country. Most of its locations are ‘large edge-of-town store formats,’ meaning it tends to operate in larger premises away from town centres.

In addition to this, Topps also has a Topps Tiles Boutique arm with smaller locations as well. It trades through retail and trade channels. The trade channel offers it an opportunity to carve out a customer base in the burgeoning construction industry due to economic reopening.

Penny stocks are those that trade for less than £1. As I write, shares in Topps Tiles are trading for 65p per share. A year ago shares were trading for 43p per share which is a 51% return over 12 months. Year-to-date, the Topps share price is up 14% from 57p per share to current levels.

Why I like Topps Tiles

1. Many penny stocks often suffer from negative investor sentiment due to a lack of information and track record. Topps Tiles is a 50-year-old business that has continued to grow. This growth has continued even while the face of retail has changed from physical stores to online shopping. It also has a good track record of performance. I understand past performance is not a guarantee of the future but I use it as a gauge nevertheless. For example, between 2017 and 2019, revenue and gross profit increased year on year. 2020 levels did drop but this was due to the pandemic and store closures.
2. The pandemic led to a DIY craze. I admit to being one of the new DIY enthusiasts since the pandemic began although I haven’t attempted tiling (yet)! This new set of skills could continue and see fewer people call tradespeople and do it themselves, benefiting firms like Topps.
3. The burgeoning house building sector will benefit sales at Topps too. Property prices are on the up and there is a well documented shortage of homes, which house builders are attempting to cater for. As the UK’s number one tile retailer with a dedicated trade arm, Topps could see its performance boosted.

Penny stocks have real risks

I need to keep in mind that Topps Tiles’ operations are cyclical, which means if the economy and house building demand were to suffer, Topps could suffer a decline in performance. Next, competition is rife in the construction and tiling industry. Retail and trade customers are always looking for the best deal. The rise in online-only firms who don’t need to worry about paying for premises could hinder Topps’ performance too.

Overall, I believe Topps Tiles is one of the best penny stocks out there. It has some excellent unique selling points and an established track record of success and growth. The current delicate state of the economy, with rising inflation and cost of living, does worry me as it could affect Topps’ performance. Despite that, I would add Topps shares to my portfolio at current levels.

The property powerhouse

Large parts of the retail sector are under the cosh as internet shopping explodes. But while the high street is feeling the strain, the outlook for retail parks remains quite solid. This makes Ediston Property Investment Company (LSE: EPIC) arguably one of the best property stocks to buy right now.

The boom in ‘click and collect’ means Ediston could be an indirect winner from the e-commerce surge. Retail units with more space and with better accessibility by car are likely to be in increasing demand as companies try to latch onto this theme.

Additionally, it’s thought that retail park stores are more popular with shoppers than crowded shopping centres and high streets following the Covid-19 outbreak, and that they’ll continue to be preferred.

I also like the fact that rents at retail parks tend to be much lower than other retail locations. This is especially important at a time when retailers’ margins are being crushed by business rates and rising labour and input costs. It provides another reason to expect demand for Ediston’s properties to pick up considerably.

Rent rolls and, consequently, earnings at Ediston could take a smack in the immediate future however. Rising Covid-19 cases in the UK mean that restrictions on non-essential retail could be reimposed. Furthermore, falling consumer spending power in the wake of soaring inflation could also indirectly hit the penny stock’s profits.

That said, as a long-term investor the threat of such temporary turbulence doesn’t put me off. I’d happily buy this cheap UK share now or in the near future.

Another penny stock on my radar

I also believe Topps Tiles (LSE: TPT) is a highly attractive, cheap UK share to buy. That’s even though its operations are highly cyclical and so it could suffer considerably if the British economy skids lower.

First of all, I’m encouraged that the robust housebuilding sector should keep sales at the retailer rising solidly. Latest Office for National Statistics data showed average property prices soar 10.6% year-on-year in August. This was up from the 8.5% increase the prior month.

All this illustrates the massive homes shortage on these shores that I believe will persist for years to come. In this climate major housebuilders should continue busily building and demanding Topps Tiles’ product in massive quantities.

I’m also expecting sales there to remain strong as the country’s DIY craze continues following recent Covid-19 lockdowns. The retailer’s huge investment in its e-commerce channel should help it to win customers in the years ahead too.

Like Ediston Property, this is a top penny stock I’d buy in November and hold for years.