2 Magnificent S&P 500 Dividend Stocks Down as Much as 25% to Buy and Hold Forever

The State Street Consumer Discretionary Select Sector SPDR ETF, the bellwether exchange-traded fund (ETF) dedicated to that sector, is off 1.2% year to date. That performance is all the more gloomy when considering the S&P 500 is up 8.6% since the start of 2026.

As expected, some consumer discretionary stocks are outperforming the group as a whole, while others are outright duds. But one thing that's interesting about the consumer cyclical laggards group is that it includes some potentially attractive dividend names.

These two dividend stocks are down, but not out. Image source: Getty Images.

In fact, there are 20 consumer discretionary stocks spanning large-, mid-, and small caps that are down at least 20% year to date and have dividend yields of at least 2%. Yes, some members of that group are falling knives and/or value traps, but there are also large-cap names here with legitimate opportunities for long-term dividend investors.

Here's a pair that might be worthy of buying on the dip.

Cold pizza, hot dividend opportunity

Down 14.4% over the past month and residing 36.7% below its 52-week high, Domino's Pizza (NASDAQ: DPZ) has gone stale -- at least, in the eyes of some investors. Disappointing first-quarter results, delivered late last month, are certainly part of the problem. Revenue beat Wall Street estimates, but earnings per share (EPS) and same-store sales missed sell-side forecasts, sending the stock tumbling.

The EPS and same-store sales misses are indicative of macroeconomic factors, such as sticky inflation and tepid consumer sentiment, weighing on some of the previously best fast-food stocks, including Domino's.

Compounding the pizza franchise's woes is that it was one of 16 stocks Berkshire Hathaway dumped in the first quarter. So what was once a "Warren Buffett" stock is no longer.

For many investors, the Buffett endorsement is meaningful, as it should be, but Berkshire parting ways with Domino's isn't necessarily a kiss of death. By his own admission, Buffett sold some Berkshire holdings too early over the years, with Apple and General Motors, among others, being two prime examples.

Domino's management is signaling it sees value in the shares, as it announced a new $1 billion share repurchase program alongside its first-quarter earnings release. As for the dividend, the stock yields 2.3%, and the payout was boosted by 15% in February, marking the 14th consecutive year the pizza chain has increased its dividend, indicating a commitment to payout growth.

A calculated gamble

This year is proving to be, at best, a mixed period for casino stocks. Down 13.8% over the past month and 29.6% removed from its 52-week high, Las Vegas Sands (NYSE: LVS) is clearly on the rough end of the casino stock neighborhood this year. Perhaps it shouldn't be.

A case can be made that this is a baby thrown out with the bathwater. Despite its name, Sands doesn't run any casinos in its hometown. It doesn't operate any gaming venues in the U.S. Its portfolio comprises five Macau integrated resorts and Marina Bay Sands in Singapore, which just so happens to be one of the most profitable casinos in the world.

Likewise, Sands isn't involved in the U.S. sports wagering industry, which keeps it out of prediction markets' competitive crosshairs. With Macau expecting a record 42 million visitors this year, it's arguably perplexing that this stock is struggling so much.

Part of the problem boils down to constrained hotel room supply in Macau, the result of operators, including Sands, enhancing their properties. At the company's Venetian Macau, some of its currently closed suites are expected to reopen next quarter, with the overall refresh slated to be finalized in 2028. That could pay dividends because improved amenities and rooms can lure more big-time gamblers from mainland China.

Speaking of dividends, Sands' payout increase streak is just two years, but that needs to be put in the context of the payout being suspended in 2020 to conserve capital during the COVID-19 pandemic. It wasn't restored until 2023, but consecutive increases show some commitment to restoring the payout to its former glory. The gaming company is also a dedicated buyer of its own shares, having repurchased nearly $3 billion of its stock since the start of last year.

Todd Shriber has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Berkshire Hathaway, and Domino's Pizza. The Motley Fool recommends General Motors. The Motley Fool has a disclosure policy.