3 Dividend Growth Stocks That Have Recently Hit New 52-Week Lows

The one thing that's better than just a regular dividend stock is a stock that also grows its dividend. For investors, this provides an incentive to hang on for the long haul, as the income from the investment rises over time.

A bonus is when dividend growth stocks are on sale, as that means their yields are also higher than normal. Three stocks that recently hit new 52-week lows and that are solid income investments are Lowe's (NYSE:LOW), Southern Company (NYSE:SO), and Duke Energy (NYSE:DUK).

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Lowe's

Lowe's is a top home improvement company with a history dating back more than a century. It's not only a top retailer in the country but also a solid income-generating investment.

This year, the retail stock has been struggling, as it's down 23% since the beginning of the year. Rising interest rates may have rattled investors, fearing that it will result in a decline in homebuying and thus, renovations. But for long-term investors, that really doesn't matter. There will be an inevitable bounce-back, as home repairs and renovations are inevitable expenses that can only be delayed.

With the decline in its share price, Lowe's makes for a fantastic buy right now. Its yield is up to 2.7%, which is more than double the rate of the S&P 500 average (1.1%). The company has increased its dividend for decades, with the most recent increase coming in May, when Lowe's raised its dividend by 4%.

Although the market may be bearish on Lowe's, its future remains bright. And in the trailing 12 months, the company has generated $7 billion in free cash flow -- easily enough to cover its cash dividend payments totaling $2.7 billion over that time frame. For long-term investors, the stock looks like a no-brainer buy, especially with it trading at a forward price-to-earnings (P/E) multiple of just 16, which is based on analyst projections.

Southern Company

Another stock that's been tumbling in recent weeks is Southern Company, which operates gas and electric utilities. It's an asset-heavy business, so when interest rates rise, the market can turn bearish on it, as it has, since the Fed raised interest rates earlier in the month.

For long-term dividend investors, however, this can be great news, as Southern's stock has hit fresh 52-week lows. Its dividend yield is now up around 3.7%. In April, the company announced it was raising its dividend for a 25th consecutive year, as it boosted its quarterly dividend payment by eight cents.

The stock has a manageable payout ratio of about 72%, which suggests it's not only safe but that there is room for more rate increases in the future. The inherent stability of its business makes this a top dividend stock to consider hanging on to. Its forward P/E of 17 is also lower than the S&P 500 average of 20, making it an appealing value buy.

Duke Energy

Another utility stock the market has grown bearish on amid rising interest rates is Duke Energy. It's trading at a new low, and, due to its recent tailspin, it now yields 3.8%, making it the highest-yielding investment on this list.

Duke is a leading energy company with both gas and electric operations, as it serves millions of people every day. A decade ago, the stock was paying its shareholders $0.855 per share on a quarterly basis. It has since increased its quarterly payout by 27%, to $1.085 per share each quarter. That averages out to a compounded annual growth rate of 2.4%.

This is another utility stock that's also trading at approximately 16 times its forward earnings. It's hard to go wrong with any of these dividend stocks, but with Duke being a top energy company and offering the highest yield, it may just be the most attractive one on this list.

David Jagielski, CPA has no position in any of the stocks mentioned. The Motley Fool recommends Duke Energy and Lowe's Companies. The Motley Fool has a disclosure policy.