2 High-Yield Dividend Stocks Just Got Kicked Out of the S&P 500. Is Either a Buy Now?

S&P 500 removals on June 22 forced mechanical index-fund selling in Campbell’s (CPB) and Pool (POOL), but both remain in the S&P SmallCap 600. Campbell’s offers a rare ~7% dividend yield with ~76% payout ratio support from 51 years of dividend payments, though dividend growth is slow (~1.26% over five years). Pool’s yield is ~2.4%, but it has raised dividends for 22 consecutive years with ~17% average annual dividend growth, supported by first-quarter 2026 net sales up 6% and operating income up 7%. Net/net, the article frames both as dividend-driven opportunities worth evaluating beyond the index-rebalancing noise, with Pool’s near-term risk tied to housing/discretionary pool spending and elevated interest rates.

Analysis

This is primarily a flow event, not a fundamental rerating. The deletions should create a short-lived dislocation because passive sellers are price-insensitive, but for liquid names the mechanical pressure usually clears faster than the market’s attention span—days, not months. The better trade is often against the forced move once rebalance volume peaks, especially if no guidance change follows.

CPB is the harder name: the yield screens attractive, but the market will likely keep treating it as a low-growth staple with limited inflation pass-through and recurring operational noise. The real risk is not index removal; it’s that the market uses the event to keep the multiple compressed until management proves margin normalization, which makes the stock vulnerable to a value-trap narrative even while cash yield looks compelling.

POOL is different: the removed index status matters less than the business mix. A high share of maintenance revenue plus digital share gain can support a premium multiple versus housing beta, so any indiscriminate selling could be an opportunity. The contrarian point is that the market may be underestimating how much steady repair/replace demand can offset weak discretionary outdoor spending; the thesis breaks if rates stay high long enough to push maintenance customers into deferral and if growth reverts to low single digits for several quarters.

Key Decisions for Investors

• CPB: wait for 2-5 trading days after the rebalance window, then buy only if the stock is still trading at an elevated yield and no negative earnings revision has appeared; target a 1-3 month mean reversion trade, but cut it if the next quarter shows no margin recovery.
• POOL: use any post-removal weakness to accumulate a starter long, with a 6-12 month view; the risk/reward is better than CPB because the business has more visible compounding, but size it modestly and exit if maintenance/repair growth decelerates materially.
• Avoid chasing the additive semiconductor names on the event alone; if you want exposure, use a broad proxy like SMH/SOXX only as a small tactical long for the rebalance window, since the index flow tailwind is incremental, not thesis-changing.
• Alert, not a trade: if CPB or POOL retrace most of the rebalance-driven underperformance within a week, the alpha has likely already been captured; at that point the better decision is to fade any remaining weakness only on fundamental confirmation, not on the index event itself.