Got $5,000? These 3 high-yielding dividend stocks are trading near their 52-week lows

If you have $5,000 that you can afford to invest in the stock market today, there are some good opportunities that can make the most of that money. Not only can you find some good long-term buys trading at cheap valuations, but there are also some safe dividend stocks trading near their 52-week lows.

Buying dividend stocks at modest valuations can give you the opportunity to lock in higher-than-normal returns while also setting yourself up for big profits if stocks end up rallying. There are three stocks that could be great options to invest $5,000 in right now CVS Health (CVS -2.07%), United Parcel Service (UPS -1.18%)and Hershey (HSY -0.30%).

CVS Health

Healthcare company CVS Health is having a rough year. Its shares are down 28% and are trading near a 52-week low of $52.77. Much of the damage is self-inflicted, unfortunately, as the company lowered its guidance for the year three times — and there are two quarters left!

The company is experiencing an increase in medical expenses which has had a negative impact on its health insurance business. That’s the bad news. The good news is that this trend won’t last long. Surgeries were postponed and postponed during the peak of the pandemic, and amid the return to normality, there has been an increase. But that should normalize in the coming years. And other areas of CVS (health services, pharmacy) are not doing as badly. Adjusted operating profit fell by more than $700 million last quarter, but the health benefits segment accounted for most of that decline — $600 million.

And even with the decline, the stock’s payout ratio remains sustainable at 45% of earnings, suggesting CVS’s dividend is safe. At 4.7%, you can secure a dividend that pays more than 3 times S&P 500 average of 1.3%. There could still be more downside to CVS’s stock price in the near term — but if you’re willing to be patient with the stock, it could turn out to be a great buy.

United Parcel Service

Logistics giant United Parcel Service, better known as UPS, is trading down a few dollars from its 52-week low of $123.12. The company has been feeling the effects of tough economic conditions, with its consolidated revenue falling 1% in the most recent quarter (which ended in June) to $21.8 billion. Profits fell nearly 30%, with UPS reporting adjusted diluted earnings per share of $1.79 for the period.

Management is confident it can return to earnings growth, but potential worsening economic conditions may not help that goal. The near future may present UPS with additional challenges. Still, in the long run, it’s not a bad move to invest in one of the world’s leading logistics companies. Analysts at Mordor Intelligence project that the freight and logistics market could be worth $8. trillion by 2030 as it grows at a compound annual rate of over 5%.

UPS may be struggling right now, and its payout ratio may be a little worrisome at just over 100%, but as it cuts costs and works to increase its bottom line, that percentage should come down. With a dividend yield of 5.1%, UPS may offer investors a strong incentive to be patient with the stock.

Hershey

Another underrated dividend stock to own is the Hershey candy company. It’s up 4% this year but still sits within 10% of its 52-week low of $178.82. It also pays an above average dividend yielding 2.8%. It’s not as big as the other stocks on this list, but it can also be a good option for income investors to consider.

The company sees demand easing slightly due to a slowdown in discretionary spending. Sales in the most recent quarter, which ended in June, fell nearly 17 percent, with revenue coming in at just under $2.1 billion. Hershey posted a 21% decline in its North American confectionery segment, but posted an encouraging 6% sales increase in its salty snacks division. Despite the difficult quarter, the company still expects a 2% increase in its net sales for the current year and a decline of no more than 3% in its reported earnings per share.

Hershey’s payout ratio remains manageable at 57%, which is a good sign for investors that there is ample buffer to support the current dividend. With some strong brands in its portfolio, including Reese’s, Rolo and dozens of others, this can be a great food stock to invest in for the long term.