2 Magnificent S&P 500 Dividend Stocks Down 30% to Buy and Hold Forever

In the ever-changing landscape of the stock market, identifying undervalued dividend stocks with strong long-term prospects can be a rewarding endeavor for investors. Two such stocks, United Parcel Service (UPS) and Devon Energy (DVN), have recently experienced significant declines but possess compelling fundamentals that make them attractive buy-and-hold candidates.

United Parcel Service, a global leader in logistics and package delivery, has seen its stock price decline by approximately 30% from its all-time highs. Despite this setback, UPS remains a formidable player in its industry, with a robust business model and competitive advantages that support long-term dividend growth. The company's extensive global network, strong brand recognition, and diverse service offerings enable it to maintain a dominant position in the market. UPS's dividend has a forward-looking yield of 5%, making it an attractive option for income-oriented investors.

Historically, UPS has demonstrated a strong commitment to returning capital to shareholders through dividends. The company has increased its dividend for 12 consecutive years, reflecting its consistent earnings growth and financial strength. UPS's dividend payout ratio, which measures the proportion of earnings distributed as dividends, has remained relatively stable over the past five years, indicating that the company's dividend is supported by its earnings.


UPS's management team has a proven track record of capital allocation and strategic decision-making, which has contributed to the company's long-term success. The company has consistently reinvested in its business, expanding its network and improving its operational efficiency. UPS's focus on innovation and technology has also enabled it to adapt to changing market conditions and maintain its competitive edge.

However, UPS is not without its risks and challenges. The company's exposure to the global economy and its reliance on discretionary spending make it susceptible to economic downturns. Additionally, the increasing competition in the delivery and logistics industry, particularly from technology companies, poses a threat to UPS's market position. Nevertheless, UPS's strong brand, extensive network, and diverse service offerings position it well to navigate these challenges and continue its dividend growth trajectory.

Devon Energy, an oil and gas exploration and production company, has also experienced a significant decline in its stock price, falling by approximately 22% from its peak. Despite the volatility in the energy sector, Devon Energy's strong fundamentals and dividend growth potential make it an attractive buy-and-hold candidate. The company's forward-looking dividend yield of 4.7% is one of the highest among its peers, making it an appealing option for income-oriented investors.

Devon Energy's business model is centered around the exploration and production of oil and natural gas, with a focus on onshore projects in the United States. The company's core sites span from south Texas to North Dakota, providing it with a diverse and robust asset base. Devon Energy's dividend has a history of growth, with the company increasing its payout for several consecutive years.


Devon Energy's management team has a proven track record of capital allocation and strategic decision-making, which has contributed to the company's long-term success. The company has consistently reinvested in its business, expanding its production capacity and improving its operational efficiency. Devon Energy's focus on innovation and technology has also enabled it to adapt to changing market conditions and maintain its competitive edge.

However, Devon Energy is not without its risks and challenges. The company's exposure to the volatile energy market makes it susceptible to fluctuations in commodity prices. Additionally, the increasing competition in the energy sector, particularly from renewable energy sources, poses a threat to Devon Energy's market position. Nevertheless, Devon Energy's strong fundamentals, robust dividend growth potential, and experienced management team position it well to navigate these challenges and continue its dividend growth trajectory.

In conclusion, United Parcel Service and Devon Energy are two magnificent S&P 500 dividend stocks that have recently experienced significant declines but possess compelling fundamentals that make them attractive buy-and-hold candidates. Both companies have demonstrated a strong commitment to returning capital to shareholders through dividends, supported by their robust business models and competitive advantages. While these companies face risks and challenges, their experienced management teams and capital allocation strategies position them well to continue their dividend growth trajectories. Investors seeking undervalued dividend stocks with strong long-term prospects should consider adding UPS and DVN to their portfolios.