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3 Magnificent S&P 500 Dividend Stocks Down as Much as 27% to Buy and Hold Forever
Most people don’t have the time to babysit their stock portfolio, so simple, dominant businesses that you can realistically buy and hold without having to do more than some occasional checking in on are often ideal.
The consumer space is an excellent place to find these types of companies. Consumer spending is the engine that drives the economy, and people tend to remain loyal to the brands they know most.
Here are three magnificent S&P 500 dividend stocks that have tumbled as much as 27% from their high but remain compelling buy-and-hold candidates. Tucking these blue chip dividend stocks into a long-term portfolio should yield steady wealth and dividend income for the foreseeable future.
Image source: Getty Images.
Market uncertainty has sent investors piling into The Coca-Cola Company (KO 0.32%). As a result, the global beverage giant has recently made new highs, though the stock has pulled back by about 5%.
The legendary dividend stock offers investors safety, as the business has demonstrated remarkable consistency for more than a century, evidenced by its 64 consecutive annual dividend hikes. (Any company that has increased its annual dividend for at least 50 consecutive years is considered a Dividend King**.)**
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NYSE: KO
Coca-Cola
Today’s Change
(-0.32%) $-0.25
Current Price
$77.63
Key Data Points
Market Cap
$334B
Day’s Range
$76.59 - $77.71
52wk Range
$65.35 - $82.00
Volume
2.1K
Avg Vol
18M
Gross Margin
61.75%
Dividend Yield
2.63%
Coca-Cola’s renowned brands and vast distribution network have a global footprint. These are tremendous competitive advantages in a highly fragmented beverage industry. The company continues to grow at a mid-single-digit pace, propelled by a mix of factors, including global population growth, price increases, and newly created or acquired products.
I wouldn’t call Coca-Cola’s stock cheap at more than 23 times forward-looking earnings estimates, but it’s not so expensive that investors should avoid it altogether. Holding shares and reinvesting its dividend over the course of 20 to 30 years is how the stock will do its best wealth-building work for you.
Just as people always get thirsty, they also need to eat. Domino’s Pizza (DPZ 2.02%) has become a juggernaut. The world’s largest pizzeria restaurant chain has more than 22,000 locations. Its franchise model produces stable revenue streams from fees and royalties on store sales. Pizza has a broad cultural appeal and is one of the best ways to feed a group at a low price.
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NASDAQ: DPZ
Domino’s Pizza
Today’s Change
(-2.02%) $-8.11
Current Price
$392.42
Key Data Points
Market Cap
$13B
Day’s Range
$391.37 - $399.76
52wk Range
$370.70 - $499.08
Volume
82K
Avg Vol
817K
Gross Margin
39.95%
Dividend Yield
1.77%
You could call Domino’s Pizza a rising star in the dividend stock community; the company has raised its dividend for 14 consecutive years, and there’s plenty of room to extend that streak. The dividend costs just 35% of this year’s estimated earnings, and Domino’s has big plans to continue opening more stores over the coming years.
Many consumers are struggling financially, so sentiment toward many restaurant stocks has cooled. Domino’s Pizza has fallen more than 27% from its all-time high. The stock now trades at less than 21 times forward earnings, an attractive long-term buying opportunity, with analysts expecting 11% to 12% annualized earnings growth over the next three to five years.
The U.S. housing market has been extremely lucrative for The Home Depot (HD 1.69%), the world’s largest home improvement retailer. For many consumers, homes represent a significant chunk of their financial assets, and the emotional connection to your home is a strong motivator to stay on top of repairs, maintenance, and upgrades.
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NYSE: HD
Home Depot
Today’s Change
(-1.69%) $-5.99
Current Price
$348.79
Key Data Points
Market Cap
$349B
Day’s Range
$346.87 - $353.55
52wk Range
$326.31 - $426.75
Volume
133K
Avg Vol
4.2M
Gross Margin
31.33%
Dividend Yield
2.62%
Home Depot enjoys a widespread footprint in the United States and has adapted well to e-commerce. Much of what Home Depot sells is too large to ship online, and many consumers like to see appliances, paint colors, and other home goods in person before purchasing. Home Depot is also building a strong dividend track record with 17 consecutive annual increases and counting.
The stock sits 17% off its high due to soft home improvement spending in recent quarters. Consumer finances will fluctuate over time, but housing is a staple of American culture. Home Depot will likely continue enjoying its firmly entrenched leadership in this space for years to come. That makes the stock a strong buy-and-hold candidate on notable dips, like what investors are seeing now.