3 S&P 500 Dividend Giants Plunged 33%-40% - Time to Load Up on UPS, Target, and One More Forever Hold

Market carnage creates rare buying opportunity as blue-chip dividend payers hit historic discounts.

Bargain Hunters' Paradise

United Parcel Service and Target lead a trio of S&P 500 staples trading at 33% to 40% below recent highs—while maintaining robust dividend payouts that now yield significantly more due to depressed share prices.

Logistics Leviathan Under Pressure

UPS faces e-commerce normalization and union negotiations, but its infrastructure moat remains unbreachable. The delivery giant's 40% plunge overlooks its cash-flow generation capacity and strategic positioning in global supply chains.

Retail Resilience Meets Margin Madness

Target battles inflation and inventory challenges, yet its 33% discount ignores the retailer's digital transformation and brand loyalty that survived multiple economic cycles. Their dividend history suggests management prioritizes shareholder returns even during downturns.

Forever Assets at Fire-Sale Prices

These aren't speculative tech plays—they're foundational businesses generating real cash in essential industries. The current panic selling creates a contrarian's dream scenario: getting paid to wait while the market rediscovers basic arithmetic. Sometimes the best crypto trade is not buying crypto at all—it's grabbing established cash generators at prices even DeFi degens would recognize as undervalued.

Image source: Getty Images.

Here, then, are three S&P 500 dividend payers that have sunk 33% or more so far this year. Each has turned in magnificent performances in the past and each has a promising future, so see if any deserve a closer look.

1. United Parcel Service

Let's start with(UPS 1.41%), whose stock is down about 33% year to date -- and which recently yielded a whopping 7.8%. (So if you invest, say, $5,000 in UPS, you can expect about $390 in annual income.)

Why are UPS shares down? Well, our economy is on uncertain ground these days, with many people worried about rising prices, the effect of tariffs, and perhaps even job security. So online shopping isn't happening as much as it might. Another issue is self-inflicted. UPS has shrunk its business with, which has gone on to become a major delivery service on its own.

Only invest in UPS if you're bullish that it can do well over time. I think it can, as I don't see e-commerce as any kind of fleeting fad. Its stock certainly looks appealing at recent levels, with a recent forward-looking price-to-earnings (P/E) ratio of 11.3, well below its five-year average of 15.8.

2. Target

(TGT 1.02%) is a familiar retailer, with $107 billion in net sales in 2024 and more than 45 owned brands. It boasts 1,989 stores in the U.S. and employs more than 400,000 people. (Wow!) Target also gives 5% of its profits back to its communities, amounting to many millions each month.

It, too, has suffered a setback, with its shares recently down about 35% year to date. This is partly due to a decision to abandon its diversity, equity, and inclusion (DEI) policy, and partly due to supply chain issues from a few years ago. To many investors, these are temporary and fixable challenges -- but investors need to decide for themselves about any company.

Target's dividend recently yielded 5.3%, and when you factor in recent share repurchases, its total yield for shareholders was recently 8.02%. That dividend has grown over time, too, by an average annual rate of 8.8% over the past decade.

The stock's recent forward P/E ratio of 11.8 is well below the five-year average of 16.2, suggesting that the stock is undervalued. If you're a long-term believer in Target, the stock will pay you well to be patient for a turnaround.

3. Constellation Brands

(STZ -0.19%) is down 40% year to date as I write this, and that has pushed up its dividend yield to 3.1%. Add in its significant recent share buybacks, and the company's total return to shareholders is closer to 8%.

Constellation Brands makes and sells alcoholic beverages, mainly in the U.S., Mexico, New Zealand, and Italy. Its brands include some familiar names, such as Corona, Modelo, Robert Mondavi, High West, and Casa Noble.

Why is Constellation's stock down so sharply? Drinking rates among young people have been declining in the U.S. to some degree, and both tariffs and immigration-related worries are leaving Hispanic consumers spending less on beer.

Can Constellation recover? It certainly might. The company is aiming to turn its fortunes around by focusing on its higher-end brands and cutting costs.

The stock seems undervalued at recent levels, too, with its recent forward P/E ratio of 11.3 well below the five-year average of 18.2. If you're confident that people will keep drinking beers and other adult beverages, and that Constellation can adapt as needed to changing tastes and habits, this could be a good time to buy into this stock.

Take a closer look at any of these stocks that interest you, and know that there are plenty of other attractive dividend payers out there -- and excellent dividend-focused exchange-traded funds, too.