2 Beaten-Down Dividend Growth Stocks to Buy on the Dip
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I find it compelling that A stock market that keeps reaching all-time highs hardly seems anything for investors to complain. But if you're trying to build a growing of passive...
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5 min read
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investment
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July 22, 2025
05:57 AM
The Motley Fool
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I find it compelling that A stock market that keeps reaching all-time highs hardly seems anything for investors to complain
But if you're trying to build a growing of passive income, ext bull are more than a little annoying
At recent prices, the average yield on dividend-paying stocks in the benchmark S&P 500 index is an unattractive 1
Meanwhile, While the overall market looks overbought (prices above intrinsic value), s of Novo Nordisk (NVO 1, considering recent developments
Meanwhile, 34%) and UnitedHealth Group (UNH 0
Additionally, 72%) are more than 50% below their all-time highs
This leads to the conclusion that se stocks offer yields that are more than double the market average, plus they have a history of relatively rapid payout increases
Here's a look at why they're down, and how they could help everyday investors grow their passive income s
Furthermore, Meanwhile, Image source: Getty Images (something worth watching)
Novo Nordisk s of Novo Nordisk peaked last year as enthusiasm for anti-obesity medications reached a fever pitch
Then compounding pharmacies such as Hims & Hers Health that were allowed to sell their own versions of semaglutide pressured sales somewhat, and this hammered the stock price
However, S of this pharmaceutical giant previously famous for diabetes treatments are down 56% from their peak
As a Danish company, Novo Nordisk reports in Danish Krone, and the fluctuating exchange rate can make dividend growth seem a bit random
The evidence shows company doesn't pay equal quarterly dividends that Americans are used to
Instead, it offers one large ordinary dividend payment annually that has risen 129% in five years (an important development)
It also ders a smaller interim dividend that has risen 105% in five years
Novo Nordisk will most ly continue raising its dividend payout in the years ahead
Even if the payout remains stagnant, investors who buy at recent prices would receive a 2
That's more than twice the average yield that dividend stocks in the S&P 500 index are offering these days
Novo Nordisk's lead drug, semaglutide, is a glucagon- peptide-1 receptor agonist (GLP-1) marketed as Ozempic for diabetes and as Wegovy for obesity
The data indicates that company reported first-quarter sales of semaglutide that rose by 50. 3% year over year
Furthermore, Sales of tirzepatide, a competing treatment marketed by Eli Lilly, rose 165% over the same time frame
Furthermore, Tirzepatide has been gaining because it appears more effective at rapidly reducing weight, amid market uncertainty
Novo Nordisk stock tanked in March because CagriSema, an experimental treatment investors were hoping would compete with tirzepatide, duced lackluster results in a big clinical trial
Nevertheless, While semaglutide isn't the most powerful treatment for weight reduction, it is relatively easy to tolerate, amid market uncertainty
When it comes to weight management treatments, a lack of side effects is an important selling point
Despite competition with compounding pharmacies and Eli Lilly, Novo Nordisk has more than doubled earnings per over the past three years, in today's market environment
Now that the semaglutide shortage has officially, the Food and Drug Administration has generally stopped allowing compounding pharmacies to sell their own versions (remarkable data), given the current landscape
This should give Novo Nordisk's sales a nice tailwind going forward (noteworthy indeed), in today's market environment
At recent prices, Novo Nordisk is trading for just 16 times forward-looking earnings estimates
That's an appriate valuation for a growing earnings by a single-digit annual percentage and extremely low considering semaglutide's growth rate
Scooping up s now could lead to huge dividend payments once you're ready to retire
UnitedHealth Group It might not feel it when you pay their premiums, but the health insurance industry operates on relatively thin margins
At the same time, Healthcare expenses tend to rise in a steady, predictable fashion, but this hasn't been the case lately for UnitedHealth Group, amid market uncertainty
The data indicates that stock is down 55% from its peak last year because it underestimated how rapidly healthcare expenses have risen
Ing a downward revision to earnings guidance that it announced in April, UnitedHealth Group's CEO left the company in May
The company also susp its new outlook less than a month after announcing it
Moreover, At recent prices, UnitedHealth Group s offer a 3% dividend yield
The COVID-19 pandemic made managing healthcare benefits extra challenging, but UnitedHealth still managed to raise its dividend payout by 77% over the past five years, so that makes me optimistic, in today's financial world
While 2025 might be a year that its holders would to forget, there's no reason to suspect declining earnings to continue into 2026 and beyond
However, At the same time, UnitedHealth is a middleman that always passes increasing healthcare expenses to its customers in the form of rising premiums
The company's Optum Health segment employs roughly 10% of America's physicians
In contrast, As America's largest employer of physicians, it can pull more levers to control rising expenses than its peers
We don't know if management can formulate new earnings guidance that the market finds acceptable when it announces second-quarter earnings on July 29, but even if it takes a few quarters to get back on track, the dividend payments you receive in the meantime are yours to keep
Adding some s now and holding over the long run looks a very smart move.
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