Every investor is looking for an edge, but there are plenty of ways to go about finding one. Two of the most popular approaches are buying stocks after a pullback and investing in dividend payers. Each strategy appeals to a different objective, and in some cases, they can complement one another.

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Buying the dip is all about leaning into the market's oldest cliché: buy low and sell high. When a fundamentally solid company falls out of favor, investors have an opportunity to buy shares at a lower valuation before sentiment improves.

Dividend stocks bring a different set of advantages. Instead of relying solely on capital appreciation, investors receive regular cash payments that can be reinvested, used to generate income, or simply held as cash. High-yield dividend stocks can be particularly attractive for those seeking a steady source of income regardless of short-term market swings.

A stock that has pulled back while continuing to offer an attractive dividend yield may provide investors with the potential for both income and capital appreciation. When Wall Street analysts also see meaningful upside, the investment case becomes even more compelling.

With that in mind, we turned to the TipRanks database to pinpoint two stocks yielding at least 12% that have declined this year but still offer double-digit upside based on analysts' price targets. Let's dive in.

Blue Owl Capital (OBDC)

The first stock that fits both strategies is Blue Owl Capital, a business development company, or BDC. BDCs provide financing to middle-market businesses that often have limited access to traditional bank lending, making them an important source of capital for a large segment of the U.S. economy.

Blue Owl specializes in direct lending, with a portfolio built primarily through loans originated by its own investment team. As of the end of the first quarter, the portfolio had a fair value of $15.3 billion across 230 portfolio companies. Approximately 78% of investments were senior secured loans, while 96% carried floating interest rates. The company seeks to generate attractive risk-adjusted returns through a mix of senior secured, subordinated, mezzanine, and equity-related investments. Blue Owl also benefits from its affiliation with the broader Blue Owl Capital platform, whose credit business manages more than $159 billion in assets.

The portfolio is both conservative and diversified. First-lien senior secured loans account for 72% of investments, while exposure is spread across roughly 30 industries and throughout the U.S. Internet software and services represent the largest industry allocation at 10.3%, followed by healthcare providers and services at 9.1% and asset-based lending and fund finance at 7.1%. Geographically, the South accounts for the largest share of the portfolio at 36.9%, followed by the Northeast at 21.7% and the Midwest at 20.5%.

OBDC shares are down about 6.5% this year as investors have become more cautious toward the private credit sector. Lower interest rates and tighter lending spreads have weighed on sentiment, while the company's first-quarter earnings miss added to those concerns.

For the first quarter of fiscal 2026, Blue Owl reported total investment income of $396.8 million, down 14.6% year over year and $24.9 million below Wall Street's expectations. Non-GAAP net investment income came in at $0.31 per share, missing the consensus estimate by $0.04.

Alongside the results, the company declared a quarterly dividend of $0.31 per share. While that represented a $0.06 reduction from the prior quarter, the payout was fully covered by net investment income. At the current rate, the dividend equates to an annualized payout of $1.24 per share, giving the stock a forward dividend yield of 11.3%.

Lucid Capital analyst Erik Zwick covers OBDC, and he begins with what he sees as the stock's unjustifiably depressed valuation. He argues that investors are overlooking the company's resilient portfolio, improving dividend coverage, and attractive long-term value.

"In our view, the stock's current 0.74x P/NAV reflects a combination of negative investor sentiment for the sector driven by concern over AI disruption risk to software investments and unwarranted spillover from financial press headlines regarding elevated redemption requests at one of Blue Owl's (parent) non-traded BDCs. Based on our proprietary analysis, OBDC's software portfolio is both smaller than the peer average and has fewer investments at high-risk to AI disruption. Additionally, with the quarterly dividend recently reset to $0.31/sh, we forecast average dividend coverage of 103% over the next seven quarters. With the stock currently trading at 0.74x NAV, significantly below the BDC's long-term average, we feel the shares are attractively valued today… Given our outlook for increasing dividend coverage and better than peer credit quality, we expect the company's trading multiple to expand over our forecast horizon of 12–18 months," Zwick opined.

Quantifying that bullish stance, the analyst rates OBDC shares as a Buy, and his $13 price target indicates a one-year upside potential of 19%. Add in the dividend yield, and this one-year return may reach as high as 30%. (To watch Zwick's track record, click here)

Overall, there are four recent analyst reviews on OBDC, and they are all positive, for a unanimous Strong Buy consensus rating. The shares are priced at $10.92, and the $13.50 average target price implies a gain of ~24% in the coming year. (See OBDC stock forecast)