3 Magnificent S&P 500 Dividend Stocks Down More Than 13% to Buy and Hold Forever

The S&P 500 has sold off in recent weeks, tumbling more than 10% from its peak at one point. Many stocks have fallen even further. However, the silver lining of any sell-off is that it enables investors to buy stocks at lower prices.

Falling stock prices also increase dividend yields, and now's a great time to load up on some high-quality dividend stocks. Kinder Morgan (NYSE: KMI), NextEra Energy (NYSE: NEE), and Prologis (NYSE: PLD) are all currently down more than 13% from their recent peaks. The trio has done a magnificent job paying high-yielding and steadily rising dividends, which makes them great stocks to buy right now to hold for a potential lifetime of dividend income.

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Lots of fuel to continue growing its payout

Shares of Kinder Morgan have slumped just over 13% from their recent peak. That sell-off has pushed the pipeline stock's dividend yield up to 4.3%. That's significantly higher than the S&P 500's 1.3% dividend yield.

Kinder Morgan has already unveiled plans to increase its high-yielding dividend by another 2% this year. That will mark the eighth year in a row that it has increased its payout.

The pipeline giant should have plenty of fuel to continue increasing its high-yielding payout. It generates significant excess free cash flow after paying dividends, which gives it funds to invest in expanding its operations. The company recently bought a natural gas gathering and processing system in North Dakota for $640 million, which will supply it with incremental income. In addition, it has approved $5 billion of new large-scale natural gas pipeline projects in recent months. It now has $8.1 billion of projects in its backlog that should enter service and add to its cash flows through the end of the decade. With natural gas demand expected to continue rising in the coming decades, Kinder Morgan should be able to keep growing.

The powerful dividend growth should continue

NextEra Energy's stock has fallen nearly 14% from its recent peak. That decline has driven its dividend yield up to 3.1%.

The utility has done a magnificent job growing its dividend. It has increased its payout for 30 straight years. Meanwhile, it has grown its dividend at a 10% compound annual rate over the past 20 years. The company expects to deliver dividend growth of around 10% annually through at least the end of next year.

NextEra Energy is investing heavily in building additional renewable energy capacity. Those investments should help grow its adjusted earnings per share at or near the high end of its 6% to 8% annual target range through 2027. Meanwhile, surging demand for electricity from catalysts like AI data centers and electric vehicles should enable the company to continue growing briskly in the years to come.

Leading dividend growth

Prologis' stock has tumbled 15.5% from its recent peak. That sell-off has hiked its dividend yield to 3.6%.

The leading industrial REIT has grown its dividend at a 13% compound annual rate over the past five years. That's more than double the S&P 500's dividend growth rate and the average REIT, both 5%.

Prologis is in a prime position to continue growing its dividend at an above-average rate. The company is benefiting from strong and growing demand for logistics real estate such as distribution centers because of the growing adoption of e-commerce and changing supply chain management practices. That's driving rent growth across its portfolio. It also allows the company to invest in development projects. It has a vast land bank to continue building new logistics properties. The company has also started to use some of its land to develop data centers to capitalize on the massive digitalization megatrend.

Top-notch dividend stocks

Kinder Morgan, NextEra Energy, and Prologis are magnificent dividend stocks. They all pay high-yielding dividends that they've steadily increased over the years. That steady growth should continue in the decades ahead. With their share prices down and yields up, they're great dividend stocks to buy right now to hold for a potential lifetime of passive dividend income.

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Matt DiLallo has positions in Kinder Morgan, NextEra Energy, and Prologis. The Motley Fool has positions in and recommends Kinder Morgan, NextEra Energy, and Prologis. The Motley Fool recommends the following options: long January 2026 $90 calls on Prologis. The Motley Fool has a disclosure policy.