3 Magnificent S&P 500 Dividend Stocks Down Over 30% to Buy and Hold Forever

Key Points

• Alexandria Real Estate has a unique property focus that is out of favor right now.

• General Mills is a consumer staples giant dealing with some headwinds in the food space.

• United Parcel Service is attempting to change its business to better meet future demand, hampering current performance.

• 10 stocks we like better than United Parcel Service ›

No company is perfect. There are ups and downs that investors need to be aware of and account for in their investment theses. Sometimes, investors get downbeat on an otherwise strong stock because of near-term problems, creating the potential for an attractively priced stock when analyzed from a long-term perspective.

That's what appears to have taken place with Alexandria Real Estate (NYSE: ARE), General Mills (NYSE: GIS), and United Parcel Service (NYSE: UPS) today. All three stocks have lost roughly a third of their value over the last year. Here's why you might want to step in and buy these high-yield dividend stocks anyway.

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1. Alexandria Real Estate is the leader in an attractive niche

Technically speaking, Alexandria is an office real estate investment trust (REIT). This property niche has been out of favor since the pandemic started in 2020. But there's a nuance here, because Alexandria is focused on medical office properties. But even that's not quite enough of an explanation, because what it owns are medical research offices. That's a highly specialized niche that is likely to see strong long-term demand, given the importance of medical research to new product development in the healthcare sector.

Right now, Alexandria is dealing with some tenant issues. Occupancy fell to 90.8% in the second quarter of 2025, from 94.6% at the start of the year. Funds from operations (FFO) dropped around $0.03 year over year, or around 1%. The REIT hasn't fallen out of bed as a business, but investors are clearly worried that the highly focused business model isn't working at the moment.

That's not unreasonable, but management is making changes to improve performance, including refocusing on its best assets. This is likely to be more of a transition period than one that leads to a breakdown of the company's largely successful business model.

With the stock down big, now could be the right time to buy in for investors who have a holding period preference of "forever." The dividend yield is an ultra-high 6.8% right now.

2. General Mills is dealing with difficulties like it has before

Giant food maker General Mills has been around the block a few times. It is a well-run brand manager, with distribution, product development, and marketing skills that rank among the best in the food industry. It is also large enough to buy up smaller competitors with interesting new food brands and/or food concepts.

In fact, that's a key part of the long-term business model here. General Mills is always buying and selling brands to ensure that it keeps up with consumer demand.

But sometimes, even well-run businesses fall out of line with their customers. And that's what's taking place with General Mills today, thanks to an increased focus on health from both consumers and the government. Organic sales fell 2% in fiscal 2025.

If history is any guide, this food giant will adjust as needed. But investors aren't cutting the nearly 100-year-old company any slack, and the share price has plunged. The yield is up to an attractive 4.9%. If you don't mind collecting a fat dividend while you wait for General Mills to better align with consumers, now looks like a great time to jump aboard.

3. United Parcel Service is a turnaround stock

United Parcel Service, or UPS, is going to be the hardest stock to love on this list. The shares are down materially since hitting a peak during the coronavirus pandemic, when Wall Street was overly optimistic about e-commerce and shipping companies like UPS. Shoppers did not, in fact, switch wholesale to online shopping and decided to return to stores as soon as they no longer had to socially distance.

What's interesting about UPS is that it saw the writing on the wall and chose to focus on upgrading its operations as its stock was plunging back to Earth. That has been a major drag on the top and bottom line as management sells assets, refocuses on its highest-margin operations, and increases its use of technology.

Financial results have been tough to look at, but there are glimmers of hope. For example, the revenue per package in the U.S. market rose 5.5% year over year in the second quarter of 2025, with 200 basis points of that tied to customer and product mix. In other words, the company's efforts are having the desired impact. But revenue and earnings are still going to be weak as it works through this transition period because of the nature of the changes that are being made.

The dividend yield is an attractive 7.5% right now. But investors need to go in with realistic expectations, because the dividend payout ratio was over 100% in the second quarter. The dividend could get trimmed. However, even a 50% cut would still leave the stock with an attractive yield. And the world is likely to require more shipping in the future, not less.

UPS will be there to provide the shipping, and it will likely be a much stronger company than it is today.

Great businesses and attractive yields

Alexandria, General Mills, and UPS all have very impressive businesses despite the near-term headwinds that each company is facing. But investors are thinking only about the next quarter, not the next decade. If you can see the value in the businesses here, each one could be a magnificent stock to buy and hold, even though they are deeply trailing the S&P 500 today.

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Reuben Gregg Brewer has positions in General Mills. The Motley Fool has positions in and recommends Alexandria Real Estate Equities and United Parcel Service. The Motley Fool has a disclosure policy.