2 Magnificent S&P 500 Dividend Stocks Down as Much as 25% to Buy and Hold Forever

By John Ballard – Mar 22, 2026 at 5:15AM ESTKey PointsHome Depot stock is down 25% from its previous peak, bringing its forward dividend yield to 2.7%.PepsiCo shares are down 22%, and it's currently offering a 3.7% forward yield. The stock market makes it possible for anyone to build wealth, but the occasional dip is simply the price we pay for long-term returns. That's where dividend stocks can help. Even in a brutal bear market, rock-solid companies can keep sending cash to your account, making it a lot easier to stay the course. For income-focused investors, here are two S&P 500 blue chips with long dividend-growth records -- and yields that look attractive today. Image source: Getty Images. 1.

Home Depot Home Depot (HD 2.27%) is the world's largest home improvement retailer, serving a $1 trillion addressable market. Yet the stock is currently down 25% from its prior peak as the housing market has cooled. A dividend stock's yield can offer a quick read on value. Home Depot has paid a quarterly dividend for more than 35 years. It recently raised its quarterly dividend by 1.3%, bringing the annual payout to $9.32 per share. That puts the forward yield at an attractive 2.85% -- more than double the S&P 500 average. Sales growth has been sluggish. Comparable sales in the fourth quarter rose just 0.4% year over year. Inflation and higher interest rates have pressured demand, but these headwinds tend to come and go in cycles. ExpandNYSE: HDHome DepotToday's Change(-2.27%) $-7.46Current Price$320.75Key Data PointsMarket Cap$319BDay's Range$320.26 - $330.2352wk Range$320.26 - $426.75Volume9.7MAvg Vol4.1MGross Margin31.33%Dividend Yield2.88% Management is still playing the long game. It's opening more stores and leveraging a large footprint of valuable real estate -- a key advantage as more customers order online and pick up in-store. Digital sales climbed 11% year over year last quarter. The dividend has grown about 9% annually over the past five years. With $164 billion in trailing revenue and a trillion-dollar opportunity ahead, Home Depot has room to keep growing -- and to keep paying investors a rising stream of passive income. 2. PepsiCo Shares of PepsiCo (PEP 1.77%) are down about 22% from their previous peak. Yet the company is still putting up steady results, with adjusted sales up 2% in 2025. It recently raised its quarterly dividend by 4%, bringing the annual payout to $5.92 per share, effective in June. That's the 54th consecutive annual dividend increase. ExpandNASDAQ: PEPPepsiCoToday's Change(-1.77%) $-2.70Current Price$150.04Key Data PointsMarket Cap$205BDay's Range$149.40 - $153.3952wk Range$127.60 - $171.48Volume238KAvg Vol7.9MGross Margin54.36%Dividend Yield3.79% PepsiCo's lineup goes far beyond its namesake soda. Alongside beverage brands like Sprite and Mountain Dew, it owns snack giants like Cheetos, Doritos, and Lay's. Just as importantly, PepsiCo runs a delivery network that connects directly with retail stores. Those relationships help secure shelf space and strong product visibility, supporting consistent demand. That reliability is what allows PepsiCo to generate the sales and earnings needed to fund a growing dividend for years. With a forward dividend yield of 3.87% -- more than twice the S&P 500 average -- investors are getting a solid income stock. PepsiCo has grown its dividend at nearly a 7% compound annual rate over the past five years, and it should keep rising with earnings, which analysts expect to grow about 6% annually in the years ahead.Read NextMar 17, 2026 •By John BallardThe Top 2 Retail Stocks to Buy Right NowMar 11, 2026 •By Daniel Foelber2 Dow Jones Dividend Stocks to Double Up on and Buy in MarchMar 9, 2026 •By Neil Patel3 Things to Know About Home Depot Stock Before You BuyMar 4, 2026 •By Motley Fool YouTubeHome Depot Is a Classic "Boomer Stock" -- but Its Stable Cash Flows and Dividend Still Matter for Long-Term InvestorsMar 4, 2026 •By Neil PatelIs Home Depot a Buy, Sell, or Hold in 2026?Mar 4, 2026 •By Will HealyHome Depot vs. Lowe's: Both Retail Giants Are Tapping AI, but Which One Is Doing It Better?About the AuthorJohn Ballard has been a contributing writer at The Motley Fool since 2016, covering consumer goods and technology stocks. He holds a bachelor’s degree in business administration with a focus in real estate finance from the University of Arkansas at Little Rock.TMFRazorbackStocks MentionedHome DepotNYSE: HD$320.75(-2.27%)-$7.46PepsiCoNASDAQ: PEP$150.04(-1.77%)-$2.70S&P 500 IndexSNPINDEX: ^GSPC$6,506.48(-1.51%)-$100.01*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.