3 Dividend Stocks to Buy at a 52-Week Low in April

Stocks to buy

Throughout my journey as an investor, I’ve learned that some of my most profitable picks stem from purchasing quality businesses when their share prices have been battered. A useful starting point for identifying such opportunities is filtering for stocks near their 52-week lows.

It’s crucial for investors to remember that a stock doesn’t necessarily imply an opportunity just because it’s trading near its 52-week low. After all, a sustained share price decline often reflects growing market concerns about a company’s prospects, signaling caution for potential investors.

Still, there are instances where stocks trading near their 52-week lows do offer compelling buying opportunities. The following three dividend stocks hit new 52-week lows in April. Despite the immediate link of lows to weakness, I believe that these picks exhibit strong fundamentals. That positions them as compelling buys, especially for dividend-focused investors.

Unilever (UL)

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Unilever (NYSE:UL) saw its shares flirt with new 52-week lows in April. The London-based consumer staple behemoth known for its household-name brands — including Dove, Hellmann’s and Ben & Jerry’s — has faced increased market pressure in a rising-rates environment.

With sales coming in stagnated in recent years and interest expenses climbing in the current landscape, the company’s profitability has been lackluster. Thus, it shouldn’t come as a surprise that Unilever has lost some investor appeal lately.

Nevertheless, UL stock’s sustained share price decline has likely opened up an opportunity for conservative dividend investors to pick a quality company at a discount. While it’s not common knowledge, Unilever has either kept its dividend stable or raised it for more than 20 years in euro terms.

With its well-established household brands poised to continue delivering robust cash flows for years to come, dividend investors are likely to find Unilever’s 3.6% yield appealing at UL stock’s current levels.

Gilead Sciences (GILD)

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Gilead Sciences (NASDAQ:GILD) hit new 52-week lows in April.

On the one hand, the company features a tremendous history of resilient cash flow generation. This is because Gilead’s core strength lies in its provision of life-saving therapies across several critical areas, including HIV/AIDS, inflammatory and respiratory diseases and oncology. Thanks to the critical nature of its medicines and incredible pricing power, Gilead enjoys solid sales while its EBITDA margin has fallen below 30% only once over the past decade.

That said, concerns over the company’s ability to sustain meaningful growth in the future and heightened regulatory risks surrounding drug pricing have overshadowed Gilead’s underlying financials. As a result, GILD stock has had a hard time attracting any bullish sentiment lately.

Still, the ongoing share price decline has pushed this stock’s yield to a juicy 4.6%. In the meantime, the company has already shown commitment to rewarding shareholders, which is evident in its increasing its dividend for 10 consecutive years. Accordingly, I believe GILD stock is an attractive option for dividend investors at current levels.

British American Tobacco (BTI)

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British American Tobacco (NYSE:BTI) investors have become quite used to seeing BTI stock hit 52-week lows. Interestingly, shares have been on a declining trend since 2017. This can be attributed to Wall Street’s overall distaste for tobacco stocks. Over the past couple of years, that has also been compounded by rising interest rates, leading to the high-yield stock being re-priced at lower valuations.

That said, I believe that shares have bottomed at their current levels, which is why I am personally invested in British American Tobacco. The common perception is that the company must be suffering against the backdrop of a declining population of smokers. However, by raising cigarette prices, the firm has been offsetting declining sales volumes while its market share in non-combustible categories is on the rise.

In fact, British American Tobacco posted high adjusted EPS for fiscal 2023 while also celebrating a “25-year track record of consistent dividend growth.” With such a lengthy dividend growth track record, a 10% yield and a defensive business model, income-oriented investors should find BTI stock particularly appealing at its 52-week lows.

On the date of publication, Nikolaos Sismanis held a long position in BTI. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Nikolaos Sismanis is a professional research analyst with five years of experience in the field of equity research and financial modeling. Nikolaos has authored over 1,000 stock-related articles that focus on uncovering deep value opportunities, identifying growth stocks at reasonable valuations, and shining a spotlight on overlooked international equities.

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