3 Beaten-Down Dividend Stocks for Patient Investors to Buy in July and Hold for Years to Come

Key Points

• A stellar outperforming stock to buy on a dip.

• Occidental Petroleum consistently generates strong free cash flow to source its dividend payments.

• The sell-off in Campbell’s is mostly justified, but the stock is now drastically discounted.

• 10 stocks we like better than Watsco ›

Two of the most powerful forces in investing are time and price.

An investor with a long-term time horizon can afford to be patient and let an investment thesis play out. But investing in a company at a compelling price can also lead to outsized gains.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

Folks who don't have a multi-decade-long investment time horizon may feel the need to be extra purposeful with their investment decisions. One way to achieve this is to invest in companies with reasonable valuations that also pay dividends. That way, you get paid to hold shares in a company rather than relying solely on the stock price going up to turn a profit.

Here's why Watsco (NYSE: WSO), Occidental Petroleum (NYSE: OXY), and Campbell's Company (NASDAQ: CPB) stand out as three dividend stocks to load up on now.

Image source: Getty Images.

Technology will help Watsco keep the acquisition bandwagon rolling

Lee Samaha (Watsco): The heating, ventilation, and air conditioning (HVAC) equipment and parts distributor's stock is up 991% over the last 20 years, 272% over the previous decade, 154% over the last five years, 89% over the last three years, but down 4% in the prior year.

If it looks like a buying opportunity and walks like a buying opportunity, it is a buying opportunity. For those noticing that Watsco's current dividend yield is only 2.7%, also note that if you include dividend payments reinvested in the stock over the last 20 years, it improves the return to a whopping 2,020% -- not a typo!

These stellar returns stem from Watsco's ongoing role as the leading player and consolidator in a highly fragmented industry. Simply put, Watsco is a serial acquirer of small HVAC distributors, which it then integrates into its network, thereby expanding its sales and geographic reach.

The integration of these distributors ultimately improves their operational performance as Watsco adds product lines and scale to the newly added distributors. In addition, this is a key reason to believe it can continue to make value-adding acquisitions: its use of new technology, such as mobile apps, e-commerce websites, and digital technology, to support HVAC contractors and make it easier for them to order parts from Watsco.

As such, the company has long-term growth prospects, not least as long as demand for HVAC equipment servicing is a function of the amount of HVAC equipment installed across the U.S.

Time to gas up on Occidental Petroleum stock while energy prices are low

Scott Levine (Occidental Petroleum): Dropping about 11% (as of this writing), Occidental Petroleum stock hasn't had much to celebrate so far in 2025. In fact, over the past year, shares have had a tough go of it, plunging about 29%.

Some may see the decline and think that they should keep their distance from the exploration and production company; however, those with time on their side will find a great opportunity to act now and grab a quality stock with a secure dividend that currently has a 2.2% forward yield.

Experienced energy investors looking at the decline in Occidental Petroleum's stock likely are unfazed, considering the strong correlation between movements in energy prices and those of upstream energy stocks. If energy prices drop, the exploration and production activities at some lower-margin assets become financially disadvantageous. In light of the 21.5% drop in oil benchmark West Texas Intermediate over the past year, the drop in Occidental Petroleum stock seems a lot less alarming.

Despite the lower energy prices, Occidental Petroleum performed well during the first quarter of 2025. In addition to growing oil and gas production by 18.6% year over year, the company generated $1.2 billion in free cash flow and strengthened its balance sheet with a $2.3 billion reduction in debt.

Amid the current drop in energy prices, potential investors may question the sustainability of the company's dividend, but management has taken a financially prudent approach to rewarding shareholders. Over the past five years, the company has generated ample free cash flow to cover its dividend payments.

OXY Dividend Per Share (Annual) data by YCharts

And that's not the only perspective suggesting the dividend is secure. Occidental Petroleum has averaged an extremely conservative 20% payout ratio from 2020 through 2024.

With the stock's recent decline, Occidental Petroleum now presents a compelling buying opportunity for patient investors.

This high-yield packaged food giant is a compelling value

Daniel Foelber (Campbell's): While you probably know Campbell's for its soups, you may be unfamiliar with just how beaten-down the packaged food stock is. Campbell's has been serving up investors a healthy portion of disappointment with the stock at a 16-year low.

Part of the reason for the sell-off is that Campbell's is now much more than a soup company, and not necessarily to the benefit of its investors.

In 2017, it completed its $700 million acquisition of Pacific Foods of Oregon -- expanding its portfolio of soups, broths, and plant-based beverages. That deal was fairly on brand with the rest of Campbell's lineup. However, what followed was more out of the box.

In 2018, Campbell's bought Snyder's-Lance for a whopping $6.1 billion -- which was a play in snacks like pretzels, chips, and cookies. It then bought Sovos Brands for $2.7 billion in 2024 -- which gave Campbell's a variety of pasta sauces, dry pasta, frozen entrées and pizzas, and yogurt products.

Combined, these three acquisitions amount to $9.5 billion -- which is more than Campbell's market cap at the time of this writing of $9.3 billion. So, in hindsight, Campbell's clearly overpaid for these brands.

Campbell's has struggled to convert these acquisitions into high-margin sales growth. In fact, its earnings and operating margin are around five-year lows. The good news is that Campbell's still generates a ton of free cash flow, which more than covers its sizable dividend (yielding 5.1%).

Campbell's stock is beyond cheap -- with a 10.5 forward price-to-earnings (P/E) ratio compared to a 10-year median P/E of 19.9.

Add it all up, and now is an incredible opportunity for investors who believe Campbell's can turn its business around to scoop up shares of the packaged food giant.

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Daniel Foelber has no position in any of the stocks mentioned. Lee Samaha has no position in any of the stocks mentioned. Scott Levine has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Watsco. The Motley Fool recommends Campbell's and Occidental Petroleum. The Motley Fool has a disclosure policy.