2 Beaten-Down Dividend Stocks You Can Buy Right Now

The S&P 500 remains close to correction territory, and there are some excellent bargains to be found in the stock market right now. And not just when it comes to beaten-down technology stocks.

There are some excellent opportunities right now for investors who are looking for income and growth and want stocks to hold for the long term. Here are two in particular that have been beaten down and are worth a closer look as we head into the second quarter of 2025.

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Iconic assets and great financial strength

Empire State Realty Trust (NYSE: ESRT) is a real estate investment trust (REIT) that owns a portfolio of office, retail, and residential real estate in New York City, including the iconic Empire State Building. Although its business is performing quite well, shares have been beaten down recently and are down by about 33% from their 52-week high.

First, this is a highly profitable business and despite the common perception that offices are largely sitting empty right now, Empire State's office portfolio is 93.5% leased. That's 2.6 percentage points higher than it was a year ago. Plus, the Empire State Building Observatory, which the company owns and operates, is an absolute cash machine, generating just under $100 million in net operating income in 2024.

Empire State is also in excellent financial shape. It has $0.9 billion of total liquidity, including $385 million in cash -- it's only a $2.1 billion market cap company -- and a very reasonable debt load. This should allow the company to capitalize on opportunities as they arise, including acquisitions and stock buybacks, which management pursued aggressively during the pandemic years.

To be sure, the stock isn't down for no reason. For one thing, REITs are rate-sensitive stocks, and Empire State reached its high while the Federal Reserve was cutting rates last year. Now that rate cuts have been on pause and inflation is proving more difficult to control than many expected, it has weighed on the stock. Empire State also has some exposure to government leases, and while the company has done a great job of navigating the remote work trend, companies could start reducing their office space if a recession hits. However, from a risk-reward perspective, Empire State makes a lot of sense at a valuation of just over nine times the company's 2025 funds from operations (FFO) guidance.

A great business that has taken a hit

Another REIT that has taken a big hit recently is Digital Realty Trust (NYSE: DLR), which has lost 25% of its value in the past four months. The short explanation is that Digital Realty is a data center REIT, and its future growth largely depends on investment in artificial intelligence (AI) infrastructure. To put it mildly, when DeepSeek, essentially China's answer to ChatGPT, was launched in December, it caused investors to question the large sums companies have been spending on AI models and data centers.

However, while AI spending could be uncertain in the near term, the long-term thesis is intact. The global demand for data center space isn't likely to decline anytime soon, and Digital Realty's latest results show that the business is doing quite well. In the fourth quarter, Digital Realty's FFO growth accelerated, as the company reported extremely strong leasing activity and ended 2024 with a backlog of $797 million in annualized rent.

Digital Realty is also doing a great job of investing in growth, especially through partnerships with companies including Blackstone (NYSE: BK) and Realty Income (NYSE: O). Management has done a fantastic job of improving the balance sheet, and this is a much stronger company now than it was a few years ago.

Buy for the long term

I own both of these REITs in my portfolio, and in the case of Digital Realty, I've held my shares for more than a decade already. Both of them are long-term investments for me. I have absolutely no idea what either of these REITts will do over the next few weeks or months, and if certain near-term headwinds happen, like a spike in inflation, they could certainly fall further.

Having said that, these are two excellent businesses at cheap prices, and investors who measure their returns in decades might be very glad they decided to take a closer look at these prices.

Don’t miss this second chance at a potentially lucrative opportunity

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Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.

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*Stock Advisor returns as of April 1, 2025

Matt Frankel has positions in Digital Realty Trust, Empire State Realty Trust, and Realty Income. The Motley Fool has positions in and recommends Digital Realty Trust and Realty Income. The Motley Fool recommends Empire State Realty Trust. The Motley Fool has a disclosure policy.