Stocks to buy

3 Stocks to Buy at 52-Week Lows: March 4 Edition

Dumpster diving can be fun! One man’s trash is another’s treasure, particularly when investing. Stocks tossed into the trash and trading at 52-week lows can many times turn into real jewels for your portfolio.

Of course, you should use caution. Just because a stock is down does not make it a buy. Cheap stocks are often cheap for a reason. You can’t readily fix them because something is wrong with the business. Avoid those stocks at all costs. You don’t want your portfolio to be like an episode of TV’s Hoarders where you’ve crammed it full of other people’s junk.

A careful examination, though, finds these three stocks to buy at 52-week lows that should generate substantial returns. They just need a bit of dusting off and care first before they can shine.

York Water (YORW)

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Utility stocks might not be the most exciting investment but York Water (NYSE:YORW) brings with it a consistency unmatched on Wall Street. The company provides clean water and wastewater services to 55 municipalities in south-central Pennsylvania. Founded in 1816, York is the oldest investor-owned utility. The utility has also paid a dividend every year for 208 years! There is no stock with a better dividend track record than York Water.

Yet the utility also recently hit a 52-week low of just under $35 a share. Inflation and high interest rates tend to hit utilities harder than other businesses because they are capital-intensive businesses, making them more expensive to operate. They also tend to be at the mercy of local regulatory boards that oversee rate hike requests.

At the same time, regulators tend to approve their rate requests because the utilities need to maintain their infrastructure. York is due to report its fourth-quarter earnings soon but so far has enjoyed rising revenue due to rate hikes approved last May. Coupled with its historic dividend payments that currently yield 2.3% annually and investors have a diamond in the rough here. It offers predictability and a total return over the past two-and-a-half decades of more than twice that of the S&P 500.

Becton Dickinson (BDX)

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Medical device maker Becton Dickinson (NYSE:BDX) was slammed late last year after its Alaris infusion pumps suffered a total recall for products sold as far back as 2004. They were found to be incompatible with Monoject syringes sold by Cardinal Health (NYSE:CAH) who inadvertently changed their dimensions. The FDA recalled everything because the Alaris pumps were only validated for use with those syringes. Cardinal’s stock took a hit too.

Becton Dickinson is also the largest manufacturer of needles and syringes and is a major supplier of flow cytometers. Researchers use these instruments to rapidly conduct analyses of cells in a solution. Becton Dickinson is a recession-resistant stock because people need their medical devices regardless of economic conditions.

The medical device maker has a large installed base of devices across the field and even with the Alaris recall should be able to retain its position. Until the recall, Becton’s track record was fairly flawless. It suggests BDX stock should recover from the snafu and continue on its former growth trajectory.

Gaming & Leisure Properties (GLPI)

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Gaming & Leisure Properties (NASDAQ:GLPI) is one of two major casino-related real estate investment trusts (REIT). The other is VICI Properties (NYSE:VICI) to which it is often compared. There are a few distinctions between the two REITs and VICI is arguably the better of the two. With GLPI stock offering a greater discount, however, it may be worth a closer look for risk-tolerant investors.

PENN Entertainment (NASDAQ:PENN), formerly Penn National Gaming, spun off the casino REIT in 2013. Caesar Entertainment (NASDAQ:CZR) spun off VICI in 2017. Gaming & Leisure manages 61 properties but Penn operates 34 of them. That means almost 56% of the REIT’s revenue is dependent upon one tenant. Only Bally’s with nine properties accounts for more than 10% of revenue. So Gaming & Leisure does carry some customer concentration risk. VICI is slightly more diversified with 40% of its rent coming from Caesars and 35% from MGM Resorts International‘s (NYSE:MGM) MGM Grand in Las Vegas.

Gaming & Leisure Properties reported record fourth-quarter results and estimated 2024 adjusted funds from operations (AFFO) would exceed $1 billion, slightly higher than last year. The REIT is also building a baseball stadium on the Las Vegas Strip. Expected to open in 2028, the venue will be home to the current Oakland Athletics Major League Baseball team. There is a lot of significant growth coming for GLPI stock and its deeply discounted status makes it an intriguing buy.

On the date of publication, Rich Duprey held a LONG position in CAH stock. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Rich Duprey has written about stocks and investing for the past 20 years. His articles have appeared on Nasdaq.com, The Motley Fool, and Yahoo! Finance, and he has been referenced by U.S. and international publications, including MarketWatch, Financial Times, Forbes, Fast Company, USA Today, Milwaukee Journal Sentinel, Cheddar News, The Boston Globe, L’Express, and numerous other news outlets.

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