Bottom picking is not for everyone, but when it works, it works. Investors using the strategy will have a tough time, though, as the timeline for recovery varies. So, why not mix it up and add a dividend component to your strategy? That way, you get something while waiting for recovery. Or look at it from an income investor’s perspective: you bought the stock at discount prices and now enjoy dividends as you wait for it to reach your target selling price, whatever or whenever that may be. Win-win.
So, today, I'll uncover three high-yielding dividend stocks fresh off their 52-week lows and see if they deserve a place in your portfolio.
How I Came Up With The Following Stocks
Using Barchart’s Stock Screener Tool, I analyzed the market for stocks that meet the following criteria:
- 14-Day Relative Strength Index: Above 40%.
- Number of Analysts: 8 or more covering the stock.
- Current Analyst Rating: 3.5 (Moderate Buy) to 5 (Strong Buy).
- Annual Dividend Yield: 4% or more.
- Percent From Low: Within 5% of its 1-year (52-week) low.
The relative strength index indicates if a stock is oversold or overbought across a 100-point range, with 70 and up indicating overbought and 30 and below indicating oversold. 50 is the midpoint, so I wanted stocks that are near-oversold but already making progress to getting back to bullish territory.
I got four results from this analysis and arranged them from highest to lowest yields. Unfortunately, DIN and BHP don’t have regular dividend schedules, and their high yield is primarily made up of special dividends, so I’m removing them from the list.
Now, let’s talk about the top three results, starting with number one:
Apple Hospitality REIT (APLE)
14-day RSI: 40.73
Not to be confused with tech giant Apple, Apple Hospitality is a real estate investment trust (REIT) specializing in upscale hospitality hotels. Its vast portfolio comprises 224 hotels with over 30,000 guest rooms in 87 markets throughout 37 states. Its properties consist of some of the most recognizable brands in the hospitality industry, including Hampton, Hilton, Hyatt, and Marriot hotels.
Apple Hospitality pays dividends monthly, and its latest payouts amount to a 96-cent annual forward yield, which translates to a 6.89% yield today.
Meanwhile, APLE stock has a moderate buy rating and a 3.67 average score based on nine analysts and is trading a handful of percentage points away from its 52-week low of $13.60, or 2.43% away. Interestingly, $13.60 is its lowest price in the last three years, so it’s an excellent chance to buy the stock at a bargain.
United Parcel Service (UPS)
14-day RSI: 45.46
United Parcel Service is a global package delivery and supply chain management company that provides a wide range of services, including freight forwarding, supply chain solutions, tracking, and package delivery.
Of all the companies on this list, UPS is the only one with a notable dividend increase streak. While it’s not yet batting in the Dividend Aristocrat league, a 15-year increase track record is nothing to sneeze at. Its current quarterly payout is $1.63, translating to a $6.52 annual rate and a 5.12% yield.
UPS stock has a moderate buy rating based on 23 analysts, with a 3.87 average score. Meanwhile, it’s trading 3.48% away from its 52-week low of $123.12, giving long-term investors ample opportunity to stock up on shares. However, note that its dividend payout ratio is 89.34%, a bit more than I’m usually comfortable with for non-REIT securities.
Nutrien (NTR)
14-day RSI: 41.52
Nutrien provides crop inputs (pesticides, fertilizers, and other substances added to crops or soil to improve yield) and agricultural services. The company services agricultural, industrial, and feed customers, with a retail network of over half a million grower accounts globally. Nutrien is also the largest producer of potash—a critical requirement for crops and feeds—with a supplier footprint of more than 40 countries.
Nutrien currently pays 54 cents quarterly or $2.16 annually, a respectable 4.64% yield based on current prices. It also has a moderate sale rating based on 20 analysts, with a 4.15 average score.
NTR stock is trading near its recent 52-week low at $44.90—3.59% away—giving investors a chance to get shares at a discount. NTR’s position as the world's largest potash producer and distributor has some advantages. Some experts and even farmers have expressed optimism about the agriculture industry, and Nutrien will benefit from an industry-wide boost. Its low price, relatively high yield, and buy rating make NTR stock attractive. Still, interested investors might want to look at the bigger picture, as NTR currently has a 121.46% dividend payout ratio, making it a relatively risky dividend play.
Final Thoughts
High-yield dividend stocks present a great opportunity for investors to bolster their income or retirement nest egg. Combining that with the potential for capital appreciation makes for an excellent strategy, though nothing is ever risk-free in the stock market. Do your due diligence and utilize all available resources to maximize your profit potential.
On the date of publication, Rick Orford did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
