In this article, we will take a look at some of the best beaten-down dividend stocks.
Dividend-paying stocks have traditionally been a reliable source of income for investors, though their performance has recently lagged. Since the start of 2025, the S&P 500 Dividend Aristocrats Index has gained just over 2.5%, compared with nearly 13% for the broader market.
Howard Silverblatt, Senior Index Analyst at S&P Dow Jones Indices, noted that dividend growth remained slow in the third quarter of 2025. He explained that uncertainty surrounding evolving tariff policies and their potential impact on sales, costs, and the overall economy made companies cautious about future cash commitments. While most firms continued to raise dividends, the increases were smaller among those that typically do so on a set schedule. Others that do not follow a fixed schedule appeared to delay their actions for the time being.
Silverblatt further made the following comment:
“Given the start of tariff and policy clarity in Q3, companies may increase their payouts but still require more legislative and executive assurances for forward, long-term dividend commitments. Current tax and write-off benefits from the ‘One Big Beautiful Bill’ have added to corporate earnings; as expected increased tax refunds for consumers (starting in February 2026) has permitted increased sales expectations, giving companies short-term assurances but not the longer-term confidence for larger dividend commitment.”
With this in mind, we will now take a look at some of the best beaten-down dividend stocks.
Our Methodology
For this list, we used a stock screening tool to identify stocks that are delivering negative returns in 2025. From that group, we picked dividend stocks with YTD share price declines of over 25%, as of the close of October 16. The stocks are ranked according to their share price decline.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
10. Edison International (NYSE:EIX)
YTD Drop in Share Price as of October 16: 29.11%
Edison International (NYSE:EIX) is among the beaten-down dividend stocks to invest in. The stock has declined by over 29% since the start of 2025.
Edison International (NYSE:EIX), based in California, operates as an energy holding company that provides clean and reliable electricity as well as related services through its main subsidiaries, Southern California Edison Company (SCE) and Trio. The company faced a challenging start to the year, as a series of wildfires in California put pressure on its stock. Southern California Edison, which supplies power to the greater Los Angeles area, has been at the center of this issue.
At the end of July, Edison International (NYSE:EIX) reported lower second-quarter earnings, citing increased operating costs and ongoing investigations tied to the Los Angeles wildfires. The January fires burned tens of thousands of acres, marking what could be the most expensive natural disaster in US history, and drawing heightened scrutiny toward the region’s utility providers.
Even so, analysts remain cautiously optimistic. On October 16, TD Cowen began coverage on Edison International (NYSE:EIX) with a Buy rating and a price target of $71.00, suggesting a potential upside of about 25% from its current level.
In addition to its growth prospects, Edison International (NYSE:EIX) is recognized as a reliable dividend payer, having increased its dividend for 21 consecutive years. The company offers a quarterly dividend of $0.8275 per share and has a dividend yield of 5.84%, as of October 16.
9. Bath & Body Works, Inc. (NYSE:BBWI)
YTD Drop in Share Price as of October 16: 31.39%
Bath & Body Works, Inc. (NYSE:BBWI) is one of the most beaten-down dividend stocks to invest in. The stock has fallen by over 31% since the start of 2025.
On October 13, Jefferies lowered its price target for BBWI from $32.00 to $28.50, while keeping a Hold rating on the stock. The firm observed that the company has made little headway in cutting back on promotional activity, both online and in stores. Despite management’s stated goal of relying less on discounts, new product releases are still being marked down soon after launch.
Jefferies also pointed out that the recent Disney Villains collection did not perform as well as the earlier Disney Princess collaboration, raising concerns about Bath & Body Works, Inc. (NYSE:BBWI)’s ability to sustain growth through product innovation rather than constant discounting.
Their research indicated that customer traffic, both in stores and online, has shown minimal improvement following new launches, suggesting that innovation alone has yet to meaningfully lift engagement.
Considering the continued dependence on promotions, the mixed results of new products, and the uncertain economic backdrop, Jefferies expects limited short-term growth in Bath & Body Works, Inc. (NYSE:BBWI)’s sales and margins.
That said, Bath & Body Works, Inc. (NYSE:BBWI) has been a consistent dividend payer, as the company has paid regular payouts to shareholders since initiating its dividend policy in 2021. Currently, it offers a quarterly dividend of $0.20 per share and has a dividend yield of 3.08%, as of October 16.
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