The S&P 500 has rocketed 20% year to date, but not all stocks are following the index's lead and some top consumer brands have reported weak revenue performance this year which has hurt their stocks. Nike (NKE -1.77%) and Starbucks (SBUX -1.12%) have seen their share prices fall in 2024 well off their previous highs. From a glass-half-full viewpoint, the price drop ended up boosting their dividend yields.

Here's why these two dividend stocks currently trading at a discount are solid buy-and-hold investments.

1. Nike

Nike is the top brand in an activewear market that is expected to grow to $450 billion annually by 2028, according to Statista. Recent sales weakness has spooked investors, sending Nike's stock down 55% from its previous peak. The stock now trades at its lowest valuation in seven years. The sell-off sets the stage for excellent returns when the stock eventually rebounds.

Nike averaged around 6% annualized revenue growth and 9% earnings growth over the last 10 years, but weak consumer-spending trends sent last quarter's revenue down 2% year over year. Nike has experienced softness in demand before, especially around bear markets and recessions, so investors should have some confidence that it will bounce back again.

For income investors, Nike is solid. It has paid a growing dividend for 22 years. The quarterly dividend is currently $0.37 per share, which brings the stock's forward-dividend yield to 1.7% -- higher than the 1.3% S&P 500 average. It's also paying out less than half its earnings, so it has plenty of room to grow the dividend even during a down year.

Management is finding areas to cut back on expenses so it can reinvest in better growth opportunities in its fitness and sports products segments, which are Nike's bread and butter going back 50 years. In the most recent quarter, pre-tax income grew 39% over the year-ago quarter.

With profits up, management is pulling forward its new product pipeline to improve sales. This direction is already paying off, as the investments in fitness products led to strong growth in apparel last quarter, which outshined Nike's footwear business.

Wall Street analysts have low expectations for Nike stock right now, but investors who buy shares with the intention of holding for the long term should see great returns.

2. Starbucks

Starbucks is another top brand offering great value to investors right now. Weak sales led to shares falling 23% from their previous high, but Starbucks has ample opportunities to expand in an out-of-home coffee market valued at $367 billion.

Over the last 10 years, Starbucks delivered 9% annualized revenue growth and 10% earnings growth. It has paid a growing dividend for 14 consecutive years, and that record should keep going.

Starbucks' current quarterly dividend comes to $0.57 per share, bringing the forward yield to 2.4%. The company should achieve 15 consecutive years of dividend increases later this year. It paid out just 62% of trailing earnings in dividends, and it has a new CEO with a great record of expanding margins.

CEO Brian Niccol is coming over from Chipotle Mexican Grill, where he profitably expanded stores and delivered outstanding returns to investors. At Starbucks, Niccol is looking to improve the store experience with a focus on speeding up order delivery, which should improve store traffic.

Investors should expect Niccol to improve Starbucks' competitive position to capture a share of a large and growing out-of-home coffee market. Previous management was targeting 55,000 stores, compared to its current footprint of 39,477, so there is still ample real estate for more stores. However investors should expect Niccol to place a greater emphasis on profit margin, which is good for dividend sustainability, and not expanding the store base at the expense of profitability.

The above-average yield suggests the stock is undervalued ahead of these opportunities and could deliver outstanding returns as Niccol maximizes the global potential of this leading coffee brand.