3 Undervalued S&P 500 Dividend Stocks Down 30%+ with Long-Term Growth Potential

The S&P 500 has faced a tumultuous 2025, with geopolitical tensions, inflation, and regulatory shifts driving sharp declines in many stocks. However, for patient investors, these downturns often create opportunities to acquire high-quality, dividend-paying companies at attractive valuations. Below, we analyze three S&P 500 stocks that have fallen more than 30% year-to-date but offer compelling long-term potential for a "Buy and Hold Forever" strategy.

1. United Parcel Service Inc. (UPS): A Logistics Giant at a Discount

Current Yield: 7.5% | YTD Decline: ~30%

UPS, a global leader in logistics and supply chain management, has been battered by U.S. tariff pressures and shifting e-commerce dynamics. The company announced a 20,000-job reduction in 2025 and scaled back its partnership with Amazon, contributing to a 30% drop in its stock price. Yet, UPS remains a cash-flow machine with a 15-year streak of dividend increases.

Why It's a Buy:
- Strong Fundamentals: UPS generates consistent revenue from its diversified logistics network, including international shipping and last-mile delivery.
- Dividend Safety: Payouts cover just 60% of earnings, leaving room for sustainability even amid cost-cutting.
- Long-Term Tailwinds: E-commerce growth and global trade demand will continue to drive demand for logistics services.

2. Conagra Brands Inc. (CAG): A Food Staple with a Discounted Yield

Current Yield: 7.3% | YTD Decline: ~27%

Conagra, owner of iconic brands like Bird's Eye and Orville Redenbacher, has struggled with rising input costs and shifting consumer preferences. Its stock has fallen 27% year-to-date, but its dividend remains secure, with payouts covering 60% of earnings.

Why It's a Buy:
- Recession-Proof Demand: Packaged food remains a necessity, ensuring stable sales even in downturns.
- Margin Improvements: Cost-control measures and a streamlined product portfolio are improving profitability.
- Dividend Growth History: Conagra has maintained its payout for decades, offering a reliable income stream.

3. LyondellBasell Industries N.V. (LYB): A Petrochemical Powerhouse with a Double-Digit Yield

Current Yield: 10.2% | YTD Decline: ~35%

LyondellBasell, a global petrochemical giant, has faced headwinds from inflation and geopolitical conflicts. However, its stock has plummeted 35% in 2025, creating a rare opportunity to buy a high-yield stock with a 10.2% dividend.

Why It's a Buy:
- Attractive Valuation: The sharp price drop has inflated the yield, making it one of the highest in the S&P 500.
- Operational Resilience: Strategic asset sales and cost-cutting measures are preserving cash flow.
- Cyclical Upside: Petrochemical demand is expected to rebound as global economies stabilize.

The Case for a "Buy and Hold Forever" Strategy

These three stocks exemplify the power of buying high-quality companies at a discount. While their short-term challenges are real, their long-term fundamentals remain intact:
- UPS and Conagra offer recession-resistant business models with durable cash flows.
- LyondellBasell provides a rare double-digit yield, cushioned by its strong balance sheet and industry leadership.

Investors should focus on their long-term value rather than short-term volatility. For example, UPS's 7.5% yield and Conagra's 7.3% yield are among the highest in the S&P 500, while LyondellBasell's 10.2% yield is a compelling outlier.

Final Thoughts

The current market environment has created a unique opportunity to acquire high-yield, fundamentally strong stocks at discounted prices. UPS, Conagra, and LyondellBasell each offer a mix of income, growth potential, and resilience. For investors with a long-term horizon, these companies represent a rare trifecta of value and stability.

Investment Advice:
- Diversify: Allocate across sectors (logistics, consumer staples, energy) to mitigate risk.
- Monitor Fundamentals: Keep an eye on earnings reports and industry trends.
- Stay Patient: These stocks may take years to recover, but their long-term potential justifies the wait.

By focusing on companies with strong balance sheets, consistent cash flows, and competitive advantages, investors can build a portfolio that thrives through market cycles.