S&P 500 Exit Opens Door for Two Dividend‑Heavy Stocks: Campbell’s and Pool Corp.

When a stock is dropped from the S&P 500, index‑tracking funds must sell it, creating temporary selling pressure unrelated to the company’s fundamentals.

For dividend‑focused investors, that dip can present a buying opportunity.

On June 22, S&P Dow Jones Indices removed The Campbell’s Company (NASDAQ: CPB) and Pool Corporation (NASDAQ: POOL) from the index, replacing them with semiconductor names that highlight the index’s tilt toward technology. Both firms now reside in the S&P SmallCap 600, meaning they remain publicly traded but have lost some visibility.

Campbell’s: A 7% Yield Opportunity

Campbell’s currently offers a dividend yield above 7%. The stock has faced pressure for over a year due to softer volumes, costs tied to its 2024 Sovos Brands acquisition, and an ERP system conversion that has created operational headwinds. As the share price declined, the yield rose.

The dividend has been paid for 51 consecutive years. The payout ratio is about 76% of earnings, which is acceptable, and cash‑flow coverage is even stronger. A half‑century dividend streak backed by both earnings and cash flow carries considerable weight.

Beyond the numbers, Campbell’s benefits from the Rao’s brand. Rao’s surpassed $1 billion in trailing‑12‑month net sales, and in May 2026 Campbell’s increased its stake in La Regina, the Italian producer of Rao’s sauces, to 49%. Production remains in Scafati, Italy, preserving the artisanal quality that underpins the brand’s premium positioning. Such brand equity is difficult to replicate.

The downside is modest dividend growth. Over the past five years the payout has risen only about 1.3% annually. For investors whose priority is income that keeps pace with inflation, this may be a concern. Campbell’s fits the profile of a high‑yield, low‑growth dividend stock rather than a compounding machine; its suitability depends on individual objectives.

Pool Corp.: A Dividend Growth Engine

Pool Corp.’s yield is more modest, around 2.4%, but the attraction lies in its dividend trajectory rather than the current yield.

The company has increased its dividend for 22 straight years, with an average annual increase of roughly 17% over the last decade—a powerful compounding effect.

Steady earnings growth enables consistent dividend raises. Each increase on a growing base lifts the effective yield on original cost, which is the core of dividend‑growth investing; Pool Corp. has executed this approach as well as nearly any other firm.

Pool Corp. distributes pool supplies, equipment, and chemicals to wholesale buyers and professional contractors. About 60% of revenue stems from maintenance and repair, a demand that persists regardless of housing‑market cycles. In Q1 2026 net sales rose 6% and operating income climbed 7%, signaling a gradual rebound in discretionary pool spending after the pandemic‑era boom.

The company’s digital initiative, Pool360, now accounts for 13% of net sales and continues to expand, adding operational efficiency for the long term.

A risk to monitor is Pool Corp.’s sensitivity to housing activity and consumer confidence. If interest rates stay high and homeowners postpone outdoor projects, discretionary sales could remain subdued.

Key Takeaways

Both removals stemmed from mechanical index rebalancing, not deteriorating fundamentals. Campbell’s provides an income‑heavy exposure at a rare yield for a consumer‑staples company, with Rao’s offering a credible long‑term growth catalyst. Pool Corp. exemplifies a dividend‑growth story, having earned its raises for over two decades and possessing a business model capable of sustaining them. Neither stock is a guaranteed winner, but both merit consideration beyond the superficial impact of their index exit.

Is Campbell’s a Buy Today?

Before deciding on Campbell’s, weigh the following considerations.

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