2 Exceptional Dividend Stocks Near 52-Week Lows You Could Regret Not Buying on the Dips

The benchmark stock indexes keep climbing to new heights, but there are plenty of attractive wallflowers at this dance. A couple of overlooked dividend payers offer high yields and reliable dividend payout growth, but you wouldn't know it by looking at their stock prices.

Shares of W.P. Carey (NYSE: WPC) and Royalty Pharma (NASDAQ: RPRX) were beaten down to 52-week lows not long ago, and they've only recovered a little. Let's kick the tires on these stocks to see why adding them to a diversified portfolio at beaten-down prices gives you a great chance to come out way ahead over the long run.

1. W.P. Carey

W.P. Carey is a real estate investment trust (REIT) that has been trading for about 35% below the high watermark its stock price hit in 2022. At recent prices, it offers a 6.2% yield.

Shares of this REIT have been under pressure since it spun off 59 buildings into Net Lease Office Properties in late 2023, and adjusted its dividend accordingly. Now that its problematic office buildings are another company's responsibility, W.P. Carey can boast a 98.8% occupancy rate.

Instead of operating its properties, W.P. Carey gets tenants to sign net leases that transfer all the variable costs of building ownership to the tenant. With annual rent escalators written into long-term leases, the REIT was able to raise its dividend payout for 24 consecutive years before lowering it to account for the Net Lease Office Property spinoff.

Since the spinoff, W.P. Carey has lifted its dividend payout three times, and it could grow further in 2025. Management expects adjusted funds from operations, a proxy for earnings, to land between $4.65 and $4.71 per share this year. That's heaps more than the REIT needs to meet its present dividend obligation, which is currently set at just $3.50 annually.

Beyond 2025, income-seeking investors can look forward to steadily rising payouts from this geographically diversified REIT. It owns 1,430 single-tenant buildings spread throughout Europe and North America.

W.P. Carey's tenant list is also well diversified, with the largest renter responsible for just 2.7% of rental payments expected in the year ahead. Its 10 largest tenants are responsible for just 20.2% of the REIT's annualized base rent. This probably won't be the fastest dividend raiser in your portfolio, but it could be the most dependable.

2. Royalty Pharma

Individual drug launches are more than a little unpredictable, but increasing prescription drug expenses is an extremely reliable trend that income-seeking investors can use to their advantage by investing in Royalty Pharma. At recent prices, the stock offers a 3.2% yield.

As its name implies, this specialty financier lends money to drugmakers in return for a royalty stake in their new, or sometimes still experimental products. Its track record is remarkable, with a stake in 15 blockbuster drugs that generate over $1 billion in annual sales.

Royalty Pharma began trading publicly in 2020, and since then it's raised its dividend four times for a total of 40%. Investors can look forward to more big dividend bumps in the years ahead. Since the start of 2022, it announced transactions worth $10.1 billion, and many of these investments haven't had time to produce significant royalties yet.

I expect a great deal of earnings growth from Royalty Pharma over the next few years but it's a stock investors want to hold over a decade. That's because the vast majority of businesses that develop new drugs don't have enough capital to execute a successful commercial launch. The company thinks start-up drugmakers will need over $1 trillion in capital over the next 10 years. As the industry's largest provider of royalty financing, it will get to pick and choose from a larger list of potential borrowers than its peers.

Should you invest $1,000 in W.P. Carey right now?

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Cory Renauer has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.