"If you aren't willing to own a stock for ten years, don't even think about owning it for ten minutes." -- Sir John Templeton
Dividend stocks have a few things going for them. Companies with growing dividends tend to be soundly profitable and financially healthy, which are two advantageous qualities to have during periods of economic downturn. Companies with a long dividend history are also more likely to have economic moats and advantages that enable them to pass along price increases and better maintain margins long-term.
Here are two solid companies that boast dividends and could trade higher as they improve their businesses from recent struggles.
Campbell's is an mmm mmm, good stock
It's certainly been an interesting ride over the past few years for Campbell's (CPB 0.48%). Its business mix shifted substantially, with its core soup lineup accounting for roughly 25% of total sales, down from about 40% in fiscal 2017. Snacks are up to 50%, up from less than 30% over the same timeframe.
Image source: Campbell's.
Beyond its changing sales mix, management has worked to improve operating efficiencies across its supply chain and manufacturing network, while also backing up its brands with more marketing spend. These changes have driven an increase in annual organic sales.
Campbell's still isn't done, however. It recently laid out plans to unlock $250 million in savings through fiscal 2028, on top of the $950 million it realized over the past few years. Campbell's is also driving growth through acquisitions and recently scooped up Sovos Brands, which generates more than $1 billion in annual sales.
Despite moving in the right direction and offering a dividend yield of 4.6%, the stock price has slid 20% year to date. This gives investors a chance to buy low on a consumer defensive dividend stock that is improving its business.
NASDAQ: CPB
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Just do it and pick up some Nike stock
It's been a bumpy ride over the past three years or so for the athletic apparel leader Nike (NKE 1.03%). But after the stock price spiraled 25% lower over that timeframe, it gives investors an opportunity to not only buy into its potential turnaround, but to enjoy receiving its 2.25% dividend yield while waiting.
Nike has faced recent problems that include a lack of product innovation, softer demand for sportswear, and strained relationships with wholesale customers. The company has proven that, over a long period of time, it can maintain its market share and pricing. But there are a couple of things that could drive this turnaround in the medium term.
First, although Nike's recovery in China has been slower than desired, there's still a massive opportunity as the market expands and more developing regions, such as China and Latin America, among others, have swaths of people moving into the middle class.
Second, during fiscal 2025, Nike brought back longtime executive Elliott Hill to serve as its CEO. Given his company knowledge and relationships with crucial partners, investors should be optimistic that he can improve results more quickly.
NYSE: NKE
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Buy now on these two stocks?
Both of these companies possess incredibly recognizable global brands, have real potential for stock price upside, and offer investors dividends while they wait for the business to turn around. If Campbell's executes its savings initiative and Nike can capture growth in developing regions, both could become long-term cornerstones of just about any portfolio and provide some income from healthy dividends. These are definitely two stocks you can hold without worry for a decade.
