3 Dividend Stocks Trading Near Their 52-Week Lows

Dividend stocks can be great buys when they're trading near their lows. Their yields are higher than normal, and at low valuations, there may be room for them to rally. The key thing, however, is for investors to understand the risks of doing so, because not all dividend stocks are necessarily safe buys, and high yields could also raise red flags.

Three dividend stocks that have been struggling and that are trading near their 52-week lows right now include PepsiCo (NASDAQ:PEP), TJX Companies (NYSE:TJX), and Nike (NYSE:NKE). Here's a look at how high their yields have gotten, and if these stocks could make for great income investments right now, or if investors are better off steering clear of them.

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PepsiCo

Beverage and snack giant PepsiCo currently pays investors a dividend that yields 4.3%. Over the past 12 months, the stock has fallen by more than 6%, and it's trading near its 52-week low of $133.73.

The company has a solid portfolio of top brands, centered around its Pepsi beverages and Lay's potato chips. There isn't anything inherently risky with the business itself, as it has been generating solid numbers, but it may simply not be doing enough to win investors over. Through the first two quarters of the year, its revenue has grown by just 2.5% organically.

While its growth may not be all that exciting, that doesn't mean the stock can't still make for an excellent dividend investment. Its yield is high, and with a payout ratio of 75%, there aren't any glaring concerns about the stock's dividend. Trading at just 18 times its trailing earnings, this can be a great dividend investment to buy right now.

TJX Companies

Shares of TJX are down 14% since the beginning of the year, pushing its yield up to around 1.5%. While that isn't terribly high, it's still better than the S&P 500 average of around 1.1%.

The off-price retailer has been doing well in recent quarters and posted solid 4% comparable sales growth in its most recent period, which went up until Aug. 1. It's a decent growth rate, but unfortunately, when a retail stock is trading at a rich valuation, as TJX has been, it can be vulnerable to a decline despite a good performance.

Currently, the stock trades at around 25 times its trailing earnings, and earlier in the year it was north of 30 -- a high multiple to pay for this type of business. The biggest knock on TJX may simply have been its inflated valuation. While it's a good long-term buy, I'd wait for a deeper dip in its price before buying it, as it's still a bit expensive.

Nike

Rounding out this list is Nike, which has been on the biggest decline of the three. It's already down about 40% in 2026, as its turnaround efforts have failed to convince investors it's on the right track. Growth has been hard to come by, and there's no guarantee things will get any better for the apparel company in the near term.

Nike's yield is up to 4.3% right now, which is far higher than normal, indicating just how steep the decline has been; five years ago, its yield was less than 1%. The problem is that, given the stock's tremendous decline in recent years, the high yield is a bad sign rather than a positive one.

Due to uncertainty around the company's future and question marks about its turnaround efforts, Nike isn't a stock I'd buy for its yield. The dividend may need to be cut in the future if things don't go as planned and the business needs to divert greater resources toward its growth strategy.

David Jagielski, CPA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nike and TJX Companies. The Motley Fool has a disclosure policy.