Stock market investors looking to capitalize on potential market corrections should keep an eye on dividend stocks, as their yields are likely to become even more attractive during a downturn. Historically, dividend stocks have provided higher total returns with lower volatility compared to the broader market. While they may not fall as much as major indexes during sell-offs, corrections tend to impact them as well.
During market sell-offs, high-quality dividend stocks can offer opportunities for investors to scoop up shares at discounted prices, leading to even higher dividend yields. Three top dividend stocks to watch during market downturns are NextEra Energy, Brookfield Infrastructure, and Enbridge.
NextEra Energy, a leading clean energy-focused utility, has a track record of delivering superb dividend growth, with a current yield of around 2.8%. The company aims to increase its dividend by around 10% annually through at least 2026, supported by strong earnings and cash flow growth.
Brookfield Infrastructure, a global infrastructure giant, offers a dividend yield of 4.5% and aims to raise its payout by 5% to 9% annually over the long term. The company expects organic growth drivers and acquisitions to drive FFO growth and support dividend increases.
Enbridge, a Canadian utility and pipeline company, has raised its dividend for 29 consecutive years and currently offers a yield of around 7.5%. Despite modest growth projections, the company’s cash flow per share is expected to increase, supporting further dividend growth.
Investors looking for high-yielding income streams and healthy growth profiles should consider these dividend stocks, as they have the potential to deliver strong total returns in the future. Additionally, their attractiveness as investment opportunities may increase during market sell-offs, making them top picks for income investors looking to capitalize on market downturns.
