The stock market’s persistent rise to new heights has left many top-rated dividend stocks overlooked. Amid this frenzy, W.P. Carey (NYSE: WPC) and Royalty Pharma (NASDAQ: RPRX) are two compelling additions that should be considered further for investing in dips. Both stocks are available at their 52-week lows at reasonable valuations accompanied by a steady, stock-market-driven sense of long-term growth potential. If you’re looking to buy these dividend stocks on the dip, here’s why they might deserve a spot in your portfolio.
Consider buying these dividend stocks on the dip
W.P. Carey: A Dependable REIT With a Generous Yield
One of the leading real estate investment trusts (REITs), P. Carey faced several setbacks in 2023, after it spun off its commercial (office) properties in a new entity, Net Lease Office Properties. This move caused some temporary stock price pressure, but it allowed W.P. A concentration on premium properties by Carey to increase its range.
Currently trading about 35% below its 2022 peak, W.P. Carey offers a substantial 6.2% dividend yield. The high occupancy rate (98.8%, and the long-term gross leases that offload the operating expenses to tenants” provide the stable cash flow. This REIT has raised the dividend on multiple occasions after the spinoff and is also on track to increase those payments in 2025.
With 1400 single-tenant structures in Europe and North America and a diverse tenant base, W.P. Carey is built for stability. None of them occupies more than 2.7% annual rent. But if you are looking for dividend stocks (W.P. Carey’s background and performance potential for moderate “upswing” make it a realistic option for income-oriented investors.
Royalty Pharma: A Unique Player in the Pharma Space
Royalty Pharma is active in a niche segment of healthcare financing, whereby it lends money to drug companies in exchange for royalties on the drug companies’ products. This business model has secured 15 blockbuster drugs, each of which has yearly sales of over $1 billion.
Although Royalty Pharma has solid underpinnings, it is trading below its intrinsic value, providing a 3.2% dividend yield. After going public in 2020, the company has raised its dividend four times, 40% higher in total. However, its most recent $10.1 billion in transactions indicate a solid revenue pipeline, because much of the $10.1 billion in transactions has not yet flowed into substantial royalties.
The growing capital constraints in the pharmaceutical sector hold enormous promise. New startups and mid-sized drug companies are projected to require over $1 trillion of capital in the next 10 years. Given its lead position as royalty financier, Royalty Pharma is well-positioned to capture this expansion. Divas wanting, on the dip, to buy these dividend stocks, Royalty Pharma offers a compelling value proposition on the combination of yield and long-term growth.
Why Now Is the Time to Act?
Dividend stocks like W.P. Carey and Royalty Pharma are exceptional in providing a unique combination of both high yield and stable growth. As their damaged values give one a moment’s window, one ought (perhaps even needs) to consider adding them to your holdings. W.P. Carey offers stability through the REIT format, while Royalty Pharma offers exposure to the constantly expanding pharmaceutical industry.
However, investing in these stocks requires a long-term perspective. Both organizations are still emerging from recent tribulations and their full potential may not be realized immediately. From a patient investor’s perspective, because of the recent fall of their shares, a great future return can be made.
If you’re seeking opportunities in the current market, now might be the time to buy these dividend stocks on a dip before they rebound.