Core Insights - The article discusses the performance of dividend-paying stocks, highlighting that the S&P 500 Dividend Aristocrats Index has gained just over 2.5% since the start of 2025, significantly lagging behind the broader market's nearly 13% gain [1]. Dividend Growth and Market Conditions - Dividend growth has been slow in Q3 2025 due to uncertainty surrounding tariff policies, which has made companies cautious about future cash commitments [2]. - While most firms continued to raise dividends, the increases were smaller than usual, and some companies that do not follow a fixed schedule have delayed their dividend actions [2][3]. Economic Factors Impacting Dividends - Companies may increase their payouts as tariff and policy clarity improves, but they still require more legislative and executive assurances for long-term dividend commitments [3]. - Current tax benefits from the 'One Big Beautiful Bill' have positively impacted corporate earnings, but long-term confidence for larger dividend commitments remains uncertain [3]. Methodology for Stock Selection - The article outlines a methodology for identifying beaten-down dividend stocks, focusing on those with year-to-date share price declines of over 25% as of October 16, 2025 [5]. Company-Specific Insights Edison International (NYSE:EIX) - Edison International has experienced a year-to-date share price drop of 29.11% due to challenges such as wildfires in California and increased operating costs [8][9]. - Despite reporting lower second-quarter earnings and ongoing investigations related to wildfires, analysts remain cautiously optimistic, with TD Cowen initiating coverage with a Buy rating and a price target of $71.00, suggesting a potential upside of about 25% [11]. - The company has a strong dividend history, having increased its dividend for 21 consecutive years, currently offering a quarterly dividend of $0.8275 per share and a dividend yield of 5.84% [12]. Bath & Body Works, Inc. (NYSE:BBWI) - Bath & Body Works has seen a year-to-date share price decline of 31.39%, with concerns raised about its reliance on promotional activities and mixed results from new product launches [13][15]. - Jefferies has lowered its price target for BBWI from $32.00 to $28.50 while maintaining a Hold rating, indicating limited short-term growth expectations due to ongoing dependence on promotions [14][16]. - The company has been a consistent dividend payer since initiating its dividend policy in 2021, currently offering a quarterly dividend of $0.20 per share and a dividend yield of 3.08% [17].