Dividend stocks are one of the most powerful wealth compounders. The S&P 500 (SNPINDEX: ^GSPC) index offers the perfect example. Over the past 25 years, while the S&P 500 rose by over 300%, its total returns crossed 550% thanks to reinvested dividends.
As you may guess, the S&P 500 comprises some of the best dividend stocks out there, many of which have been multibaggers and have the potential to continue being so. Here are 10 such magnificent S&P 500 dividend stocks -- trading at least 10% below their all-time highs -- to buy now and hold forever.
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Johnson & Johnson: down 11.5%, yield 3.4%
Johnson & Johnson (JNJ 0.44%)is a cash-flow machine. It generated $95 billion in free cash flow (FCF) over the past five years and returned 60% of it to shareholders. The stock is also a dividend powerhouse, increasing its dividend for 62 consecutive years. Johnson & Johnson has robust financials, invests heavily in research and development, and has big plans for both its businesses, pharmaceuticals and medical technology, making it a top S&P 500 dividend stock to buy and hold.
ExxonMobil: down 11.6%, yield 3.7%
ExxonMobil (XOM -3.48%) is one of the world's largest oil and gas companies. In 2024, the oil and gas giant generated $55 billion in cash flow from operations, compared to $30 billion in 2019. ExxonMobil is a dividend behemoth with a 42-year streak of consecutive dividend increases. After its $60 billion acquisition of Pioneer Natural Resources in 2023, ExxonMobil has been targeting higher production at even lower costs and focusing on boosting its cash flows, all of which makes this magnificent S&P 500 dividend stock a buy at every dip.
Procter & Gamble: down 14%, yield 2.7%
Procter & Gamble (PG 0.35%) owns over 60 brands, most of which are household names today. Although its organic sales growth has slowed due to higher costs and weak consumer sentiment, it's just a short-term blip. Procter & Gamble is restructuring operations and targeting core earnings per share by mid- to high-single-digit percentages in the long term by exiting low-margin brands and markets. Above all, Procter & Gamble has a strong balance sheet and is a Dividend King, having increased its dividend for 69 consecutive years.
NextEra Energy: down 19%, yield 3.3%
NextEra Energy (NEE 1.00%) operates the largest electric utility in America (Florida Power & Light), which generates steady cash flows. It is also the world's largest producer of wind and solar energy, as well as a key player in battery storage, all of which are growth drivers. NextEra Energy stock has increased its dividend for over 20 years and has generated humongous returns for investors who reinvested the dividends. The global shift to renewables and a massive pipeline make NextEra Energy a no-brainer S&P 500 dividend stock to buy and hold forever.
Chevron: down 19%, yield 4.8%
Chevron (CVX -1.11%) is one of the largest integrated oil companies, operating across the entire value chain, from exploration and production to pipelines, refining, chemicals, and marketing. Chevron has massive oil and gas reserves but is also growing new low-carbon businesses, such as hydrogen and renewable fuels. Chevron has increased its dividend for 38 consecutive years, making it one of the best oil dividend stocks within the S&P 500. Chevron also just won a dispute with ExxonMobil and has acquired Hess in a massive $53 billion deal.
American Water Works: down 24%, yield 2.4%
American Water Works (AWK 0.40%) is the largest regulated water and wastewater utility in the U.S., serving over 14 million customers and 18 military bases.
While generating stable cash flows from these regulated and contracted businesses, American Water Works' regular investments in its infrastructure help it secure base rate hike approvals, which continue to drive its earnings, cash flows, and dividends higher. American Water Works is targeting 7% to 9% annual dividend growth for the long term, making it an incredibly safe S&P 500 dividend stock to buy now and hold forever.
Realty Income: down 29%, yield 5.6%
Realty Income (O 0.16%), a real estate investment trust (REIT), pays a dividend every month and has increased it for 110 consecutive quarters now. The company owns over 15,000 properties globally and leases them under triple-net leases, where the tenants bear most of the costs. So, Realty Income enjoys high margins, and its diverse portfolio enables the company to navigate economic challenges. Realty Income's commitment to paying a monthly and growing dividend makes it one of the top 10 dividend stocks to double up on now and hold.
Oneok: down 29%, yield 5%
Oneok (OKE 2.61%) is one of the largest energy infrastructure companies in the U.S., with a network of pipelines spanning 60,000 miles. Three big acquisitions over the past couple of years or so, including that of Magellan Midstream Partners, combined with organic expansions, should help Oneok steadily grow earnings and meet its goal of increasing the annual dividend by 3% to 4%. When coupled with a 5% yield, Oneok makes for an appealing S&P 500 dividend stock to buy and hold.
Nucor: down 30%, yield 1.7%
Nucor (NUE -0.09%) is America's largest and most diversified steel company. It is also vertically integrated, meaning it sources the bulk of its raw material in-house. That's a huge competitive advantage to have in a commodity business and one of the key factors behind Nucor's strong financials and dividend growth. Nucor aims to return at least 40% of its earnings to shareholders, has increased its dividend for 52 straight years, and is primed to benefit from President Donald Trump's steep tariffs on steel imports.
Medtronic: down 33%, yield 3.3%
With revenue of $33.5 billion for the fiscal year that ended April 25, 2025, Medtronic (MDT 0.11%) is the world's largest medical device manufacturer. It offers a wide range of products across cardiovascular, neuroscience, medical-surgical, and diabetes care and uses artificial intelligence and robotics technologies to build better products. Medtronic plans to divest its diabetes business into a separate company to unlock more value for shareholders. Meanwhile, it is only two dividend raises away from becoming a Dividend King, making this S&P 500 dividend stock a solid buy.
