2 S&P 500 Dividend Stocks That Fell Over 20%
— But Could Make Long-Term Investors Rich
The stock market has a strange way of testing investors.
When prices are rising and headlines are full of excitement, everyone wants to buy stocks. But when great companies suddenly drop 20% or more, fear takes over. Many investors start thinking something must be wrong.
History shows the opposite is often true.
Some of the best long-term investing opportunities appear when strong companies temporarily fall in price. That is especially true with dividend stocks, because even when markets become volatile, these companies continue sending cash to investors.
Right now, two well-known S&P 500 dividend stocks are trading far below their previous highs. Their businesses remain strong, their brands are recognized around the world, and their dividends continue to grow year after year.
For patient investors looking for passive income and long-term wealth, these companies may be worth a closer look.
The two companies attracting attention from long-term investors today are Home Depot and PepsiCo.
And the story behind them shows why market dips can sometimes become life-changing opportunities.
The Market Dip That Created an Opportunity
The stock market moves in cycles. Economic uncertainty, interest rate changes, and shifts in consumer spending can temporarily push strong companies lower.
That is exactly what happened recently with many blue-chip companies in the S&P 500.
For long-term investors, this creates a simple question.
What if the best time to buy great companies is when the market becomes nervous?
Legendary investors have repeated this idea for decades. When quality companies drop in price but their core business remains strong, patient investors often benefit.
Today, two companies that fit this description are Home Depot and PepsiCo.
Both companies have decades of history, global brand power, and a strong commitment to rewarding shareholders with rising dividends.
Let’s take a closer look at why investors are watching them closely right now.
Home Depot: A Retail Giant With a Powerful Dividend
Few companies are as deeply connected to American homes as Home Depot.
From DIY homeowners renovating their kitchens to professional contractors building new houses, Home Depot has become one of the most important retailers in the home improvement industry.
The company operates in a market estimated to be worth nearly $1 trillion, giving it enormous room to grow over the long term.
However, the stock has recently faced pressure.
Home Depot shares are currently down about 25% from their previous peak, mainly because the housing market slowed as interest rates increased. Higher mortgage rates often reduce home sales, which in turn can slow renovation spending.
But temporary economic pressure does not change the company’s long-term position.
Home Depot has been paying dividends for more than three decades, and it continues to reward shareholders every year. The company recently increased its dividend again, bringing the annual payout to $9.32 per share.
For investors looking for reliable income, that means the stock currently offers a forward dividend yield close to 3%, which is significantly higher than the average yield of the S&P 500.
Even more impressive is the company’s history of dividend growth.
Over the past five years, Home Depot has increased its dividend at an average rate of around 9% annually. That kind of growth means investors who hold the stock long term could see their passive income rise steadily over time.
Despite the slowdown in housing activity, Home Depot’s business continues evolving. The company is expanding its digital capabilities, allowing customers to shop online and pick up items in store.
This strategy is already showing results.
Digital sales recently increased by 11% year over year, proving that the company is successfully adapting to modern shopping habits.
With over $160 billion in annual revenue, a dominant brand, and a massive market opportunity ahead, Home Depot remains one of the most powerful companies in the home improvement sector.
For investors focused on long-term dividend growth investing, the current price decline may look less like a warning sign and more like a potential opportunity.
PepsiCo: A Dividend King With Global Brand Power
If Home Depot represents the strength of American retail, PepsiCo represents the power of global consumer brands.
Most people instantly recognize the company because of its famous beverage products. But PepsiCo is far more than just a soda company.
Its business includes some of the world’s most popular snack brands, including Lay’s, Doritos, and Cheetos, alongside beverage brands that reach millions of consumers every day.
This diversified portfolio gives PepsiCo a powerful advantage.
Even if beverage sales fluctuate, snack demand often remains strong. Together, these categories create a steady stream of revenue.
Recently, PepsiCo shares have dropped about 22% from their previous peak, largely due to broader market concerns and slowing global growth.
But the company’s financial performance remains remarkably stable.
In fact, PepsiCo reported adjusted sales growth of 2% in 2025, showing that demand for its products continues even during uncertain economic periods.
For dividend investors, the company’s track record is even more impressive.
PepsiCo recently increased its dividend again, marking the 54th consecutive year of dividend growth.
That puts the company among a rare group of businesses often referred to as Dividend Kings.
The annual dividend now stands at $5.92 per share, giving investors a forward yield of roughly 3.8%.
That yield is more than double the average yield offered by companies in the S&P 500.
Over the past five years, PepsiCo has increased its dividend at an annual rate of about 7%, and analysts expect the company’s earnings to grow steadily in the years ahead.
Another key strength lies in PepsiCo’s distribution network.
Unlike many competitors, the company has direct relationships with retail stores around the world. This allows PepsiCo products to maintain strong shelf space and visibility in supermarkets and convenience stores.
That advantage helps the company maintain consistent demand, which ultimately supports its ability to keep increasing dividends.
For investors looking for stable income stocks, PepsiCo’s long history of growth and reliability makes it one of the most closely watched dividend stocks in the market today.
Why Dividend Stocks Matter During Market Volatility
Stock market volatility can be emotionally difficult.
When prices drop, it is easy for investors to panic and sell their holdings.
Dividend stocks can help solve this problem.
When companies regularly pay dividends, investors receive cash even when share prices fluctuate. That steady income stream can make it easier to stay invested during market downturns.
Over time, reinvesting those dividends can dramatically increase long-term returns.
Some of the most successful investors in history built their wealth by focusing on strong companies with reliable dividends.
Companies like Home Depot and PepsiCo demonstrate why this strategy has worked for decades.
Both businesses generate billions in revenue, operate globally recognized brands, and continue increasing their dividends year after year.
When strong companies temporarily fall in price, long-term investors often see opportunity rather than fear.
The Bigger Picture for Long-Term Investors
The most important lesson from the stock market is that patience often wins.
Short-term market movements can be unpredictable. Economic news, interest rate changes, and investor sentiment can push stocks higher or lower in the short run.
But over long periods of time, strong companies tend to grow.
Home Depot and PepsiCo have survived multiple recessions, market crashes, and economic cycles. Yet they continue to expand their businesses and reward shareholders.
For investors searching for the best dividend stocks to buy now, these companies often appear on the radar because of their stability, global reach, and commitment to shareholder returns.
Of course, no investment is completely risk-free. Markets can remain volatile, and economic conditions can change.
However, history shows that owning strong businesses for long periods of time has been one of the most reliable ways to build wealth.
And when those businesses pay dividends, investors can benefit not only from price appreciation but also from a growing stream of income.
Final Thoughts
Investing is not about chasing the hottest trend or buying stocks when everyone else is excited.
Often, the best opportunities appear quietly, during moments when strong companies temporarily fall out of favor.
Right now, Home Depot and PepsiCo are two examples of high-quality companies trading well below their previous highs while continuing to grow their dividends.
For investors focused on long-term wealth and passive income, these companies demonstrate why dividend investing remains one of the most powerful strategies in the stock market.
Years from now, many investors may look back at this period and realize something important.
The opportunity was there.
The question was simply whether they were patient enough to take it.
Disclaimer:
The information provided in this article is for educational and informational purposes only and should not be considered financial or investment advice. Stock market investments involve risk, and past performance does not guarantee future results. Readers should conduct their own research and consult a qualified financial advisor before making any investment decisions. The author and publisher are not responsible for any financial losses that may occur based on the information provided.
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