2 Dividend Stocks to Double Up on Right Now

There are deals to be had in the stock market at any given time, especially if you're willing to look at stocks that aren't very popular at that moment. Right now, some blue chip dividend stocks are trading at compelling valuations in the healthcare space. Not only is the healthcare sector lagging the broader market, but some notable names within it have tumbled amid their own challenges. It can be uncomfortable buying stocks as prices fall, but the companies with strong financials and intact competitive moats tend to rebound eventually.

These two dividend stocks are table-pounding buys right now, despite their recent struggles. And if you already own shares, you might even consider doubling up. Here's why.

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1. UnitedHealth Group

Many investors likely know that healthcare giant UnitedHealth Group (NYSE: UNH) is struggling, beginning with the high-profile slaying of the insurance segment's CEO late last year. The problems have piled up since then, with reports of investigations into alleged improper business practices. Issues like these might doom some companies, but UnitedHealth Group is likely to survive, simply because it's arguably too big to fail.

UnitedHealth Group generates over $430 billion in annual revenue, and provides insurance and other services to millions of patients and providers throughout America's healthcare system. It's a key cog in a massive machine, and removing it would seem to require tearing everything down and rebuilding. U.S. healthcare has been the center of a political firestorm for years, but there never seems to be enough political momentum to change the system.

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Eventually, UnitedHealth Group may face fines or other penalties resulting from ongoing investigations. After that, the company will likely continue delivering profitable growth for shareholders, as it has for years. The stock has run circles around the broader market, and management has raised the dividend for 15 consecutive years.

The share price remains roughly 50% off its all-time high due to the bad publicity the company has received over the past year. That has cranked up its dividend yield to 2.7%, well above its historical norms. It also prices UnitedHealth Group at about 20 times its 2025 earnings estimates, a nice valuation, with analysts calling for almost 10% annualized earnings growth over the next three to five years.

2. Zoetis

Within the broader healthcare sector, animal health is a niche where Zoetis (NYSE: ZTS) operates as a market leader. The company has enjoyed steady growth since its 2013 spinoff from Pfizer. Zoetis develops and sells a wide range of drugs and treatments for companion animals and for livestock, particularly cattle, fish, swine, and poultry. It also has a global footprint, with annual sales of over $9.3 billion.

However, the stock has tumbled over the past year as the company has faced allegations of safety concerns regarding Librela, its treatment for canine osteoarthritis. Management noted that Librela weighed on third-quarter sales growth in the companion animal segment. That could explain the stock's sharp sell-off following its recent earnings release.

Zoetis has now fallen to fresh 52-week lows. From a fundamentals standpoint, the stock has never been this cheap. Shares now trade at a price-to-earnings (P/E) ratio of 20, half of what they've averaged since the company went public over a decade ago. Analysts still see Zoetis growing earnings at an annualized rate of 9% over the next three to five years, so this looks more like a broken stock than a failing business.

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The company has raised its dividend every year since going public in 2013, and the dividend payout ratio remains low, at less than one-third of 2025 earnings estimates. The dividend yield has never been so high, now approaching 1.7%.

Zoetis has a diverse product portfolio, so it will likely move beyond its Librela headaches at some point and remain a leader in animal health. Eventually, investors may look back at the stock's current struggles as an obvious buying opportunity.

Justin Pope has positions in Zoetis. The Motley Fool has positions in and recommends Pfizer and Zoetis. The Motley Fool recommends UnitedHealth Group. The Motley Fool has a disclosure policy.