Many of my favorite S&P 500 dividend stocks seem to perpetually trade at lofty valuations. That said, these steady-Eddie stocks will occasionally take a breather, just like the two companies in this article. After outpacing the S&P 500's total returns over the last decade -- then watching the index rocket past them in 2025 -- these two stocks now look like buy-the-dip opportunities.
Following 10% and 14% declines from their 2025 highs, here is the case for buying these two magnificent S&P 500 dividend stocks as we enter 2026.
Image source: Getty Images.
WM: Down 10% from 52-week highs
WM (WM +0.62%) is home to 506 waste transfer facilities, 105 recycling centers, 262 active solid waste landfills, and 10 renewable natural gas (RNG) facilities. Not only is the company formerly known as Waste Management the largest waste and recycling company in North America, but it has a vertically integrated model, meaning that it profits from collecting trash, selling recycled commodities, and even creating RNG from its landfills. This industry-leading network gives WM a powerful moat around its operations. As landfills around the country continue to fill up and close -- and communities resist adding any new trash or recycling facilities in their backyards -- WM's network remains a precious asset.
NYSE: WM
Key Data Points
This powerful model is clearly evident in the stock's results over the last two decades, delivering total returns of 1,060% compared to the S&P 500's 680%. Now expanding into the higher-margin medical waste industry following its Stericycle acquisition in 2024, automating many of its recycling centers, and building RNG plants to indirectly fuel its collection vehicles, WM's free cash flow could boom. The company currently pays a 1.5% dividend yield and has raised its payments for 22 consecutive years, including a recent 15% increase. Even after this latest bump, the dividend remains safe, using just 50% of the company's profits. Trading at 26 times forward earnings, WM stock isn't "cheap," but it is an excellent buy-the-dip opportunity following its 10% slide.
Cintas: Down 14% from 52-week highs
Cintas (CTAS 0.08%) is the No. 1 uniform rental provider in North America. Home to over 12,000 distribution routes, Cintas operates via two business segments -- uniform rental and facility services, as well as first aid and safety services. The beauty of the company is that its industry-leading network allows it to consistently consolidate and increase its presence in a highly fragmented market, consisting primarily of small, regional operators. Whether through tuck-in acquisitions (and even larger deals, such as its proposed $5.2 billion buyout of UniFirst) or offering a stronger value proposition to its customers, the company has delivered 9% annualized sales growth over the last decade.
NASDAQ: CTAS
Key Data Points
As Cintas consolidated its fragmented industry -- and grew its net income margin from 9% to 18% since 2015 -- it nearly tripled the total returns of the S&P 500 over the same time, becoming a 10-bagger. Powered by these streamlining operations and booming profitability, the company has grown its dividend for 33 straight years, increasing its payments by 16% annually over the last decade.
Trading at 40 times forward earnings, Cintas remains as "expensive" as ever -- even after its 14% drop. However, its history of stomping the market and persistently strong sales growth make Cintas a buy for the long haul.
