The S&P 500 is at an all-time high. However, not all stocks in the widely followed index are setting records. Quite a few S&P 500 stocks are nowhere close to their peaks.
That doesn’t mean some of them aren’t great picks, though. Here are three magnificent S&P 500 dividend stocks down 35% or more to buy and hold forever.
Shares of oil and gas producer Occidental Petroleum (NYSE: OXY) are roughly 47% below the high set in late 2022. The stock has ranked among the S&P 500’s biggest losers this year.
But is Occidental a stock to buy and hold forever? Warren Buffett thinks so. He wrote to Berkshire Hathaway shareholders earlier this year that Oxy was one of a handful of select stocks that he planned to own “indefinitely.”
Buffett knows how important U.S. oil production is to the country’s security and economic strength. He also knows that Occidental Petroleum has “vast oil and gas holdings” in the U.S. and is a leader in carbon capture and storage (CCUS) technology.
Granted, Occidental Petroleum doesn’t pay a jaw-dropping dividend. Its forward dividend yield is only 1.85%. However, this oil stock should deliver solid total returns over the long term, especially if its CCUS initiatives achieve their potential.
Pfizer (NYSE: PFE) reached its peak share price in late 2021 thanks to skyrocketing sales of its COVID-19 products. The big pharma stock has plunged almost 60% since then as those sales tanked. Pfizer also faces uncertainty with several top-selling products losing patent exclusivity over the next five years.
The steep decline has resulted in two positive side effects. First, Pfizer’s forward dividend yield is now an ultra-high 6.5%. Second, the stock is cheap. Shares trade at a forward price-to-earnings ratio of only 8.6. By comparison, the average forward earnings multiple of the S&P 500 healthcare sector is 18.3.
Also, Pfizer’s prospects aren’t as dire as they might seem. The company has used its COVID-19 cash stockpile to make multiple acquisitions. These deals added drugs to Pfizer’s lineup and candidates to its pipeline that should fuel growth over the next decade and beyond.
More importantly, Pfizer has the resources and expertise to continue investing shrewdly in internal research and development and acquisitions in the future. This drugmaker has survived and thrived since 1949. I predict Pfizer will remain a pharmaceutical winner for a long time to come.
United Parcel Service (NYSE: UPS) stock is around 46% below its high set in early 2022. Like Pfizer, the package delivery company benefited from the COVID-19 pandemic. Instead of selling vaccines and antiviral therapies, though, UPS delivered record numbers of packages as many people in the U.S. and other countries were stuck at home.
Shipment volumes have fallen in recent years as the effects of the pandemic have waned. UPS also faced the threat of a strike by the Teamsters Union in 2023. The strike was avoided when the company signed a five-year deal with increased expenses that were heavily front-loaded, weighing on UPS’ earnings.
However, UPS could be poised to mount a solid rebound. The company has seen two consecutive quarters of shipment volume growth in the U.S. The brunt of the higher costs associated with the Teamsters contract has already been felt. UPS is also focusing on more profitable areas including healthcare logistics and meeting small- to medium-sized businesses’ shipping needs.
Income investors should find UPS especially appealing. The company’s forward dividend yield stands at 5.2%. UPS has increased its dividend for 15 consecutive years. I expect it will keep that streak going with another dividend hike in the near future.
Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.
On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:
Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $369,349!*
Apple: if you invested $1,000 when we doubled down in 2008, you’d have $45,990!*
Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $504,097!*
Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.
*Stock Advisor returns as of December 9, 2024
Keith Speights has positions in Berkshire Hathaway, Pfizer, and United Parcel Service. The Motley Fool has positions in and recommends Berkshire Hathaway and Pfizer. The Motley Fool recommends Occidental Petroleum and United Parcel Service. The Motley Fool has a disclosure policy.
—
Blog powered by G6
Disclaimer! A guest author has made this post. G6 has not checked the post. its content and attachments and under no circumstances will G6 be held responsible or liable in any way for any claims, damages, losses, expenses, costs or liabilities whatsoever (including, without limitation, any direct or indirect damages for loss of profits, business interruption or loss of information) resulting or arising directly or indirectly from your use of or inability to use this website or any websites linked to it, or from your reliance on the information and material on this website, even if the G6 has been advised of the possibility of such damages in advance.
For any inquiries, please contact [email protected]
