2 Magnificent S&P 500 Dividend Stocks Down as Much as 55% to Buy and Hold Forever

Investors have punished the stocks of United Parcel Service (NYSE: UPS) and Hormel Foods (NYSE: HRL). Both are S&P 500 index (SNPINDEX: ^GSPC) stocks, with each down by more than 55% since early 2022. That's a potential opportunity for investors who don't mind a turnaround. Here's a quick look at the positive story behind UPS and Hormel.

United Parcel Service says 2026 is the inflection point

UPS did a lot of heavy lifting in 2025. It closed 93 buildings and deployed automation at 57 locations. The industrial giant overhauled its distribution network, allowing it to save $3.5 billion. And, perhaps most important, the package delivery company reduced its exposure to Amazon (NASDAQ: AMZN), a high-volume, but low margin customer.

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The bad news is that revenues and earnings fell year over year in 2025. The good news is that the company's revenue per piece in the U.S. market grew 7.1%. That's an indication that the company's turnaround effort is achieving its intended result. In fact, management is very clear that 2026 is likely to be the inflection point, with the second half of the year turning out better than the first.

UPS offers a lofty 6.9% yield that the company appears ready to support. Offering a vital service, UPS is the kind of stock that you can buy and hold for decades.

Hormel expects the positives to continue into 2026

The big story for Hormel in 2025 was the strength in organic sales. The most recent fiscal quarter marked the fifth consecutive quarter in which this vital metric rose. In addition to this success, the company has been reworking its business, most notably through the sale of its commodity-based turkey business. The turnaround hasn't been easy and has involved bringing in a new CEO, but it is starting to take shape.

Notably, Hormel expects adjusted earnings to rise between 4% and 10% in fiscal 2026. The packaged food company's effort to focus on value-added products is almost complete. And its protein-leaning portfolio looks well-positioned to benefit from changes in consumption driven by GLP-1 drugs.

With an over 50-year history of annual dividend increases, this Dividend King is a strong option for income investors. The yield is a historically high 5%, and well above the 1.1% on offer from the S&P 500 index.

Buy while others are selling

Given the deep price declines in UPS and Hormel, investors are worried about these businesses. However, if you dig in and see the positives that are taking shape, you'll probably start to like these out-of-favor S&P 500 stocks. Now, before their business upturns start to gain wider attention, could be the time to buy.

Reuben Gregg Brewer has positions in Hormel Foods. The Motley Fool has positions in and recommends Amazon and United Parcel Service. The Motley Fool has a disclosure policy.