Is Banco Santander, S.A. (SAN) the Best Dividend Penny Stock to Buy According to Hedge Funds?

Banco Santander, S.A. (SAN) has been gaining attention from hedge funds due to its attractive dividend yield, undervalued status, and strong earnings growth. As of 2025, the stock is trading at a significant discount to its fair value, with a valuation score of 5/6 and a 37.3% undervalued intrinsic discount (Simply Wall St). This makes it an appealing investment opportunity for value-oriented hedge funds like Dodge & Cox, which focus on long-term investments in undervalued companies with growth potential.

Banco Santander's dividend yield of 2.75% is competitive within the industry, and its consistent payout history indicates a commitment to returning capital to shareholders. The company's strong capital position, stable dividend payout ratio, and growth in earnings have contributed to its dividend growth prospects in the long term. Additionally, Banco Santander's expansion in emerging markets, cost-cutting measures, growth in digital banking, and stable dividend payout ratio have all contributed to its earnings growth and dividend sustainability.

Hedge funds' interest in Banco Santander as a dividend penny stock can be attributed to their value-oriented investment strategies, focus on dividends, activist investing approaches, portfolio diversification objectives, and risk management techniques. By investing in Banco Santander, hedge funds can gain exposure to the financial sector while managing risks associated with market volatility and economic uncertainties.



In conclusion, Banco Santander, S.A. (SAN) is an attractive dividend penny stock to consider based on its undervalued status, competitive dividend yield, strong earnings growth, and commitment to returning capital to shareholders. Hedge funds' investment strategies and portfolio allocations contribute to their interest in the company, making it a compelling investment opportunity for income-focused investors and value-oriented hedge funds.