3 Magnificent S&P 500 Dividend Stocks Down 43%, 20%, and 53% to Buy and Hold Forever

By Investor Empires On Oct 26, 2024

Like deals? Do you need profits? No problem. Many Standard & Poor’s 500s stocks fit both the bill at this time, with a bunch of them boasting what makes them truly owned “in perpetuity.” Here’s a summary of three of the best bets right now.

There’s no denying that Pfizer (NYSE: PFE) not quite Pharmaceutical The power that used to be. The loss of patent protection on the blood-thinning drug Lipitor in 2011 was a blow that was never overcome, but it would also be naive to think that the company’s research and development (R&D) operations and acquisitions are as strong now as they were in the past. The pharmaceutical industry appears to have become more competitive in the meantime.

That’s why, after a burst of bullishness during and because of the COVID-19 pandemic (Pfizer’s baxlovid was an approved treatment), this stock is down 53% from its late 2021 peak.

The long-awaited winds of change have finally blown, albeit in a way that appears more destructive than helpful. Activist investor Starboard Value is shaking the chains, so to speak, Call Pfizer For its failures on the drug development and acquisition fronts. Specifically, Starboard notes that the $43 billion acquisition of oncology company Seagen in 2023 has yet to show a meaningful benefit given its high cost, and adds that Pfizer has failed to convert on the 15 drugs it was touting as potential blockbuster drugs. In 2019 to those major money-making drugs.

In defense of CEO Albert Bourla, the coronavirus infection has slowed R&D for most pharmaceutical companies, if only by complicating the logistics of drug trials. However, Starboard makes several fair points.

But what does this mean for current and potential shareholders? While it is usually best for an organization to acknowledge its weaknesses and implement much-needed changes, Starboard Value engagement should continue to drive this long-overdue overhaul.

By the way, nothing in this drama changes anything regarding Pfizer’s profits. Not only has it been paying quarterly like clockwork for years now, it’s also been raising its net annual payout for 15 years in a row. This line is not in real danger either.

Newcomers will plug into the stock while the forward-looking dividend yield is 5.8%.

There’s a good chance you’ve never heard of it Real estate income (NYSE:O). Don’t let its lack of notoriety fool you. This $55 billion component of the S&P 500 is here to stay and thrive.

Real estate income is the owner. It is organized as a real estate investment trust, or REIT. REITs are investments that trade like stocks, but pass through the bulk of any rental earnings generated by the REIT’s underlying real estate portfolio. It’s an easy way for investors to get involved in the rental property business without the usual hassle of buying, selling, finding tenants, and performing property maintenance.

There are all types of REITs, from office buildings to apartment complexes to hotels. Even by REIT standards, Realty Income is a bit unusual. Its specialty is retail space.

This will likely raise red flags. The traditional retail industry is largely on the defensive, competing with the rise of online shopping. Don’t get too upset, though. Realty Income’s tenant roster includes the likes of Walmart, fedexand Dollar Generalbut not limited to. These are major companies that have staying power, as well as a vested interest in staying put once their brick-and-mortar roots are established.

That’s what this REIT’s numbers say, anyway. Even as the COVID-19 pandemic decimated retailers en masse in 2020, Realty Income’s occupancy rate for the year remained at 97.9%.

These aren’t the only numbers that make a strong bullish case for having this dividend payer that currently yields (on a forward-looking basis) just under 5%. Not only has Realty Income paid a dividend every month – yes, a monthly dividend – for the past 54 years, it has also raised its payout every quarter for the past 27 years.

And last but not least, add Franklin Resources (NYSE: BEN) To a list of S&P 500 dividend stocks to buy. It’s down 43% from its post-pandemic 2021 peak, and a whopping 65% below the record high it reached in late 2013. This weakness has brought the forward-looking dividend yield to a healthy 6%.

Investors may be more familiar with the outfit than they realize. This is the company behind Franklin Templeton mutual funds, although it operates several other profit centers outside the Templeton brand. Technology solutions, alternative lending, and real estate are all within its scope.

Anyone who watches this company probably knows that it hasn’t always been a stellar performer. Although well-respected in the investment management industry, Franklin struggled to retain investors’ money in 2015 and 2016. You may recall that the market had been on the rise for some time at that time, and investors were looking for performance beyond what this investment manager could provide. .

But a lot has changed since then. Specifically, through a few strategic acquisitions like put options trading technology company volScout last year, this mutual fund giant can now offer more of what investors — both retail and institutional — are demanding.

It’s not exactly easy to see the upside yet. The 2022 bear market that followed the end of the pandemic made it difficult to determine exactly how much business this company should do, and how much profit it should make. It’s easy to see that profit margins still look cramped at the moment.

However, the investment management’s profits have grown every year for the past 44 years. Given that the bulk of its revenue is based not on the performance of its funds, but rather on fees based on a percentage of the assets it manages, the cash flow it needs to maintain these payments is actually fairly safe.

Before you buy shares of Realty Income, consider the following:

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James Bromley He has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends FedEx, Pfizer, Realty Income, and Walmart. The Motley Fool has Disclosure policy.

3 Great S&P 500 Stocks That Dipped 43%, 20%, and 53% to Buy and Hold Forever Originally published by The Motley Fool