No matter what is happening to the stock market, it is always comforting to hold stocks of companies that pay growing dividends to shareholders. Let’s look at two industry leaders that are trading well off their highs and offering their highest yields in a long time.

1. Nike

Nike (NYSE: NKE) recently announced that longtime company veteran Elliott Hill will take over as President and CEO starting Oct. 14. The change in leadership comes amid weak revenue performance this year, which has sent the stock down 51% from its previous all-time high. Hill’s hiring is seen as a positive catalyst for the brand’s turnaround, as the stock is up 7% since the announcement.

Hill previously served as Nike’s President of Consumer and Marketplace, where he played a pivotal role in helping Nike expand its business globally. While investors won’t know the specific strategy Hill will implement until he is on the job, Nike’s decision to hire a former company executive could be exactly what it needs to turn things around.

Nike’s revenue declined 2% year over year in the most recent quarter, but there were silver linings that reveal how Nike can pull out of its slump. Management noted that core categories like basketball and fitness showed growth in the quarter, but that was offset by weakness in lifestyle products and the Jordan brand. This shows that Nike can perform much better if management puts more investment into its performance products, where there are ample opportunities to grow in a $300 billion athletic wear market.

Nike has paid a growing dividend for 22 straight years, and it paid out 38% of its earnings over the last year. This brings the stock’s forward dividend yield to 1.70% — higher than the 1.26% S&P 500 average. Investors should expect the new CEO to implement an effective strategy to improve performance. By this time next year, the stock should be trading higher.

2. UPS

UPS (NYSE: UPS) has paid a dividend to shareholders for 25 years, which reflects many years of solid financial performance. But the business is struggling to grow revenues as customers trade down to lower-priced shipping options. With the stock down 45% from its previous peak, investors can get the stock at a historically high dividend yield.

Wall Street has low expectations for UPS. Revenue fell slightly in the second quarter, and lower margins contributed to a 30% year-over-year decline in operating profit. But these results are already priced into the stock. If you’re buying the stock for the dividend, the most important thing is the outlook. Management expects to generate $5.8 billion in free cash flow for the full year, which is expected to fund a planned dividend payout of $5.4 billion.

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The current quarterly dividend is $1.63 per share, bringing the stock’s forward dividend yield to 5.05%. That’s very attractive for a leading global shipper. While there’s always a chance the dividend could be reduced if business conditions worsen, that seems unlikely based on management’s free cash flow guidance and the company’s recent recovery in volume growth.

UPS reported an increase in U.S. volume last quarter — the first quarter of volume growth in over two years. Management credited this improvement to new e-commerce customers coming into the UPS network, which highlights a long-term opportunity for the company. It also continues to invest in the future with the planned acquisition of Estafeta, a leading small package company in Mexico. This is a strategic move by UPS to position for growth as more customers move distribution closer to the U.S.

Buying shares of industry-leading businesses when they are experiencing temporary growing pains can lead to excellent returns. Nike and UPS are well-entrenched companies that will be around for many years, paying dividends to investors.

Should you invest $1,000 in Nike right now?

Before you buy stock in Nike, consider this:

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John Ballard has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nike. The Motley Fool recommends United Parcel Service. The Motley Fool has a disclosure policy.

2 Dividend Stocks Down Over 40% to Buy Before a Rebound was originally published by The Motley Fool