Wall Street has become far more selective on AI stocks, but these AI stocks are still receiving the lion’s share of invested capital. Dividend Aristocrat Stock Likes PepsiCo (NASDAQ:PEP | pep price prediction), Hormel Foods (NYSE:HRL)And Beckton Dickinson (NYSE:BDX) are neglectedAnd that’s why it’s worth pursuing them now.
A section of investors have already started deploying their capital into these dividend stocks. If you think the AI rally could fizzle out further due to a global recession, these dividend stocks will end up being your best friend. They offer a healthy dividend yield that you can reinvest to snowball your portfolio. Plus, you get the potential for a healthy profit on top.
Some of these dividend aristocrats is beaten So much so that their upside potential now rivals these AI stocks when you take into account the possibility of a recovery.
let’s take a look.
PepsiCo (PEP)
PepsiCo has been hit by a variety of factors since mid-2023, the most prominent of which are GLP-1 drugs. said that, I don’t think so These weight loss drugs were enough to wipe out its entire customer base. This company dominates the snack aisles, and the stock market decline was the result of a slowdown in revenue growth, not a decline like many on Wall Street would have you believe.
Market Only There was confidence that the growth path would continue from 2020 to 2022. When that didn’t seem to happen, the Street immediately discounted the stock, and in doing so, things went much further.
PEP stock now sits at just 17 times forward earnings, which is very low for a dependable dividend aristocrat stock. In the 2010s, PepsiCo had very low growth rates and was struggling to increase its sales, but the stock continued to rise nonetheless. I hope current recession To Be it temporary, PEP stock will fully recover within the next 24 months.
The biggest catalyst that could propel PEP stock upward again would be lower Treasury yields. PEP stock has a dividend yield of 3.75%, which is slightly lower than T-notes and T-bonds. Treasuries do not come with either upward growth potential or inflation prevention. Therefore, I see massive inflows into PEP stock even if T-note yields drop to 3%.
PepsiCo is the dividend king with 53 years of consecutive dividend increases.
Hormel Foods (HRL)
HRL stock has declined more than 52% over the past five years and has performed much worse than the market. It is one of the most recognized branded food companies, but it was affected by the same issues that PepsiCo grapples with. The difference is that the situation is even worse with Hormel Foods.
The increase in inflation led to increased input costs for business, and customers were not eager to purchase at higher prices. This causes net income to decline from $1 billion in 2022 to $478 million in 2025, although revenues remain stable at $12 billion.
Management made a significant mistake by acquiring Planters’ snack nut portfolio in 2021 for $3.35 billion. This one acquisition ruined the balance sheet. In 2020, cash was $1.73 billion, with $1.3 billion of debt, and after the acquisition, cash was only $635 million, with $3.3 billion of debt. Oh, and the Federal Reserve started setting record interest rate hikes just a few months later.
The saga is still costing the company dearly, with net interest losses amounting to $54 million in the last financial year.
I see a ray of hope in all this. The stock has already been priced poorly, and recovery is yet to be priced in. Hormel’s turnaround hinges on pricing that ultimately offsets input costs, commodity relief in the back half of 2026, and portfolio pruning that eliminates lower-margin businesses like whole-bird turkeys.
I believe that HRL stock will likely bottom out with a floor price of $22. You get a 5.22% dividend yield with significant long-term upside at just 15x forward earnings. HRL stock is too cheap to ignore.
Becton Dickinson (BDX)
Becton Dickinson traded sideways from 2018 to 2025 before falling 20%, and has yet to recover. BDX did not lose ground due to any one crisis, but rather successive waves due to China, research funding, tariffs, and leadership changes, giving bulls little time to regroup.
The tariff chaos and budget cuts are now behind us, and analysts expect both EPS and revenue to start improving from FY2027. The recovery is likely to be drawn out, but given how cheap the stock is, it is still worth buying. You’re paying just 12x forward earnings for the Dividend King with 53 consecutive years of dividend growth. The payout ratio is only 30%, so the 2.69% dividend yield has plenty of room to grow before reaching the ceiling.
When you include non-recurring expenses, You’re only paying 11 times earnings. Historically, BDX has traded at 21 times earnings minus non-recurring items. This leaves tremendous room for upside when things eventually return to normal.