Industrial Tools & Hardware

Search documents
3 Dividend Kings That Are Trading Near Their 52-Week Lows
The Motley Foolยท 2025-03-20 08:55
Core Viewpoint - Buying top dividend stocks near their 52-week lows can provide long-term investors with higher yields and potential for future capital appreciation Group 1: Target (TGT) - Target has faced challenges with declining sales due to reduced consumer discretionary spending, with a revenue drop of less than 1% to under $107 billion for the year ending Feb. 1 [4] - Despite the sales decline, Target maintains a strong profit margin, with a payout ratio around 50%, allowing for continued dividend increases; the current yield is 4.3% and the dividend has been raised by 70% over five years [5] - The stock has only increased by 2% over the past five years and is trading at 12 times trailing earnings, close to its 52-week low of $103.46, indicating potential for long-term investment despite short-term challenges [6] Group 2: PepsiCo (PEP) - PepsiCo has a 53-year streak of dividend increases, with a recent 7% hike, offering a current yield of 3.7%, which is significantly higher than the S&P 500 average of 1.4% [7] - The company reported flat sales of $91.9 billion in 2024, with concerns about the impact of GLP-1 weight loss drugs on consumer behavior; PepsiCo is adapting by acquiring healthier brands, such as Poppi for $2 billion [8] - PepsiCo shares have declined by 8% in the past year and are trading near their 52-week low of $141.51 at 22 times trailing earnings, presenting a potential buying opportunity [9] Group 3: Stanley Black & Decker (SWK) - Stanley Black & Decker has the longest dividend increase streak at 57 years, with a current yield exceeding 4%, making it attractive for income-focused investors [10] - The company has experienced sales declines over the past two years due to economic conditions affecting consumer spending on repairs and renovations; it is focusing on cost-cutting and debt reduction, with long-term debt at $5.6 billion [12] - Although the trailing earnings multiple is high at 43 due to restructuring charges, the forward price-to-earnings multiple is estimated at 15, and the stock is near its 52-week low of $77.70, suggesting it may be undervalued for long-term investors [13]