This year could be promising for the best penny stocks to buy on the dip. Investors have a wide array of companies to research and invest in, but not all are created equal. The best penny stocks are expected to rise with improving fundamentals.

These penny stocks offer significant potential for growth, driven by their strong fundamentals and market positioning. They represent companies with solid business models, innovative products or services, and a clear path to profitability. 

The valuations of these penny stocks to buy on a dip are dirt cheap already. However, I feel that buying on a pullback makes for an even stronger bull case for investors. If the pullback was due to a short-term weakness and not a structural one, investors can potentially improve their risk-adjusted returns from waiting for a drop in the stock price.

Here are some top penny stocks to consider for long-term investment. Each is poised to capitalize on market opportunities and deliver substantial returns over time. Let’s hop into some of the top penny stocks to buy.

Sirius XM (SIRI)

Sirius XM (NASDAQ:SIRI) is a satellite radio provider that has seen a price dip due to concerns over demand. However, the company remains profitable with a loyal subscriber base of nearly 34 million.

According to Trefis.com, SIRI stock, currently at $2.83, has the potential for a 150% upside if it returns to its pre-inflation shock high of $7.09. During the 2008 recession, SIRI lost 75% but then gained 275%.

Also, analyst Jeffrey Wlodarczak of Pivotal Research set a price target of $4.90 per share, nearly 70% higher than the current price. This optimism follows Sirius XM’s first-quarter results, which showed a modest 0.8% year-over-year revenue growth to $2.16 billion and a 14% rise in net income to $265 million.

Satellite radio has proven to be robust despite recent advancements in streaming services and the media world pivoting to a younger audience. I feel that SIRI’s bull case also remains robust despite a weaker top-line.

The Metals Company (TMC)

The Metals Company (NASDAQ:TMC) focuses on deep-sea mining for metals essential to modern technology. The company holds promising exploration rights.

TMC saw its shares rise by 15% in March after Congresswoman Carol Miller and Congressman John Joyce introduced the Responsible Use of Seafloor Resources Act. This legislation aims to boost US support for deep-sea mining by allocating federal resources for refining polymetallic nodule materials.

Polymetallic nodule materials are critical components for making steel and also lithium-ion and alkaline batteries. Refining these materials is crucial for the EV transition as well as making the U.S. more self-sustainable for the materials that it needs.

I think there are a few great reasons to remain bullish on TMC. Its stock price has a consensus upside of 244.83% at the time of writing, with the average analyst rating of “Buy”. Also, analysts forecast that it will start generating revenue sometime in FY2026 or FY2027, which reduces the runway risk if these predictions are proven correct.

VAALCO Energy (EGY)

VAALCO Energy (NYSE:EGY) is an independent oil and gas producer with operations in multiple countries.

EGY reported quarterly earnings of $0.37 per share, significantly surpassing the analysts’ consensus estimate of $0.15 per share. This is a substantial increase. It’s especially true when compared to $0.19 per share a year ago. For the quarter ended December 2023, Vaalco Energy posted revenues of $149.15 million, exceeding the analysts’ consensus estimate by 14.27%. This is an increase from $96.59 million in the same quarter last year.

EGY might be attractive for a number of reasons. Over the past five years its stock price has increased 257.14%, and it also pays a substantial dividend with a yield of 4.17%. Including its dividend growth and buybacks, it provides a shareholder yield of 8.04%.

The stock has dipped around 9% over the past month, given its choppy outlook. However, the total return potential of EGY when one includes its dividend, that’s well-covered by cash flow, could be enough to partially offset these fears.

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Read More: Penny Stocks — How to Profit Without Getting Scammed

On the date of publication, Matthew Farley did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.