3 Magnificent S&P 500 Dividend Stocks Down 11% to 63% to Buy and Hold Forever

Core Viewpoint - The current market weakness presents a buying opportunity for long-term investors, as many companies are more adaptable and resilient than perceived [2] Group 1: Cisco Systems - Cisco Systems is a notable exception in the technology sector for dividend stocks, distributing nearly $6.4 billion in dividends last fiscal year, which is over half of its net income [4] - The company has raised its annual per-share dividend for 13 consecutive years, with a recent increase of 3%, aligning with long-term sales growth, and offers a forward-looking yield of nearly 2.9% [4] - Cisco maintains a dominant position in the global ethernet switch market, controlling about one-third, which helps it fend off competition from rivals [5] - The increasing importance of software in Cisco's business model, which accounts for one-third of its revenue and has a high-margin recurring revenue stream, supports its ability to sustain dividend payments [6] Group 2: PepsiCo - PepsiCo has outperformed Coca-Cola in terms of investment returns since 1995, even with a 25% stock setback in 2023, due to larger dividend growth and aggressive stock repurchases [8][11] - PepsiCo's business model, which includes owning and operating most of its bottling and production facilities, provides better control over production and cost management compared to Coca-Cola's reliance on third-party bottlers [12][13] Group 3: Pfizer - Pfizer's forward-looking dividend yield stands at 7.8%, despite recent challenges following the decline in demand for its COVID-19 treatments [14][15] - The pharmaceutical industry often experiences fluctuations, and Pfizer's current struggles are not unusual, as many companies depend heavily on a few key products for revenue [16][18] - Pfizer anticipates four new drug approvals this year, including treatments for RSV and colon cancer, which could bolster its portfolio and future growth [19] - The company's R&D pipeline is gradually improving, and its stock price does not currently reflect its potential long-term growth prospects [20]