Historically, dividend stocks have beaten the S&P 500 with lower volatility. That makes them a desirable choice to buy for risk-averse investors, particularly those approaching retirement. Plus, the markets are in an upbeat mood this year, with a total return of 10% year-to-date, with the performance comprising roughly a 10% price return and a 0.4% dividend return​.

With the Fed looking to cut interest rates this year, the stock market will continue its upward trend. To capitalize on this price momentum, the right move is to seek out dividend stocks to buy. Especially those trading at a 52-week low. These dividend stocks provide access to a reliable income stream, reduced volatility, and, at times, a lower tax bill.

The three stocks we will profile are all trading near their 52-week lows. In two cases, REITs are featured, which have to distribute the bulk of their earnings in the shape of dividends. To capitalize on America’s aging population, the first pick will appeal to you. For investors seeking access to the metropolitan areas known as the “sun belt,” the other REIT is highly recommended. Finally, the last pick has lost favor in recent quarters, but there’s a good chance it will regain traction as it makes items everyone uses in their daily lives.

Universal Health Realty Income Trust (UHT)

Universal Health Realty Income Trust (NYSE:UHT) closed Friday at around $36, nearly 19% lower year to date. Hovering close to its 52-week low, the stock is interesting to analyze since it operates in the healthcare space. With the US aging, it should be doing well.

UHT is a real estate investment trust, or REIT, that owns and operates 76 healthcare facilities in about 21 states. It has a 38-year streak of dividend increases and an 8.14% forward dividend yield, better than more than half the REIT industry.

However, despite this aggressive dividend policy, the stock is down over 72% from its pre-pandemic level of $130 per share. Two major culprits here are leverage and FFO performance.

UHT’s debt-to-equity ratio is 1.84, ranking it lower than about 88% of the 675 companies in the REIT industry. Thanks to the Fed hikes, interest expenses are also ballooning, which will concern risk-averse investors. However, with three rate cuts expected this year, this situation will improve.

Additionally, funds from operations (FFO) dropped 9% in 2023, indicating a consistent downward trend over time. The fall in FFO was ascribed to increasing vacancy costs, difficulties in passing on rent increases to renters, and higher interest payments.

The REIT definitely needs to exercise tighter control over its operational costs if it wants to curry favor with investors again. However, considering the rate cuts this year, things are looking up for this dividend play.

Leggett & Platt (LEG)

When it comes to dividend investing, Leggett & Platt (NYSE:LEG) isn’t typically at the top of people’s lists because it makes innerspring coils for couches and mattresses, which isn’t very tempting in a market dominated by tech firms. The last three quarters, which failed to beat earnings estimates, have added to these issues.

However, the company’s long history of operation (over 140 years) and significant role in the bedding industry balance the bearish thesis, as the increasing importance of sleeping quality nowadays acts as a strong tailwind.

Furthermore, Leggett & Platt understands the situation it is facing. In Q4 ’23, the firm recorded a hefty $450 million impairment charge on long-lived assets, principally in the Bedding Products sector, attributed to weak demand and shifting market dynamics. To address the challenge, the firm is reorganizing to retain its investment-grade debt ratings and dividend policies.

On the dividend front, there is much to like. Leggett & Platt has consistently raised dividends for 53 years. During this time, we have had the global financial crisis, the COVID-19 pandemic, and the tech bubble bursting. However, LEG maintained its streak. With a 9.76% yield, the company will certainly appeal to income investors.

Furthermore, experts anticipate a return to growth for Leggett & Platt in the upcoming year, with a 13% increase in earnings forecasted. The forecast alone makes LEG one to watch among dividend stocks to buy.

CTO Realty Growth (CTO)

CTO Realty Growth (NYSE:CTO) distinguishes itself among a sea of REITs by concentrating on rapidly expanding “sun belt” urban areas, such as Atlanta, Georgia, and Dallas, Texas, all of which are seeing positive population and economic momentum. Additionally, a mix of office and retail assets gives the REIT vital diversification, especially considering the post-pandemic environment.

The operating model’s robustness is reflected in the latest financials, where the REIT beat analyst estimates three out of four times. The performance is nothing to scoff at in the middle of interest rate hikes and tighter bank lending. The latest financials for the fourth quarter and full year 2023 showcased net income, Core FFO, and AFFO increases. Analysts are projecting the performance to continue in 2024.

Additionally, the REIT boasts an 11-year streak of consecutive dividend increases. CTO’s dividend yield is approximately 9%, ranking it higher than about 70% of 814 companies in the REITs industry, setting it apart from the competition. This is easily one of the top dividend stocks to buy.

On the publication date, Faizan Farooque did not have (directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.