The S&P 500 entered correction territory last week. It fell 10% to 20% from its peak on March 13. This is the first time since 2022.
During corrections, shares of quality companies often go on sale. This gives investors better chances to buy at more attractive prices. Here are three stocks down 20% or more that may be worth considering: PepsiCo, Ulta Beauty, and PayPal.
PepsiCo is known for its beverage portfolio and Frito-Lay snacks. It is down about 25% from 2023 highs. The stock trades at 21 times earnings, a 19% discount to its usual valuation.
PepsiCo has grown its top and bottom lines in recent years. It has a nearly 4% dividend yield and 53 years of annual dividend increases. PepsiCo’s stock appears to offer good value for long-term investors.
Ulta Beauty operates over 1,400 locations, many with salon services.
correction creates stock buying opportunities
It has shown resilience, with revenue growth even during the 2008 to 2010 Great Recession.
However, guidance for modest same-store sales growth and slipping margins caused its stock to fall nearly 40%. Ulta still expects to earn $1.3 billion in operating income this year. Management plans to buy back $900 million more in shares in 2025, reducing the share count by 5%.
PayPal’s stock hit an all-time high in 2021. It slipped nearly 20% at the start of 2025 after a strong 2024, due to broader fintech downturns. Under new management, PayPal’s transaction margins are improving.
Trading at 17 times earnings, PayPal’s stock is close to its cheapest levels. With expected earnings growth, it offers significant upside potential. PepsiCo, Ulta Beauty, and PayPal are big businesses with proven resilience.
Their recent stock price drops present opportunities for investors looking to add quality names during this correction. Investors should consider the current dip as a buying opportunity. These stocks have shown resilience in the past and are well-positioned for future gains.
Always consider your own research or consult a financial advisor before investing.
