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2 Dividend Stocks with High Volatility Potential to Buy in Case of a Stock Market Sell-Off
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2 Dividend Stocks with High Volatility Potential to Buy in Case of a Stock Market Sell-Off

A sell-off could be a good time to buy these highest-paying dividend stocks.

Stock market sell-offs can be challenging for investors. It’s never nice when the value of your portfolio suddenly plummets. But with challenges can come opportunities.

One bright spot in the sell-offs on the stock markets is that Dividend yield move in the opposite direction to stock prices. For this reason, they often offer the opportunity to gain even more lucrative income streams from some of the top Dividend stocks. Dominion Energy (D 1.30%) And Brookfield Infrastructure (BIPC 0.97%) (GDP 1.45%) stand out as great dividend stocks to buy during sell-offs because large A decline would further increase their already high yields.

Striving for stability

Dominion Energy currently offers a dividend yield of almost 5%, which is well above average considering that the S&P500‘S The dividend yield is below 1.5%.

The Utility plans to current payment rate for the next several years. The company is in the process of selling three natural gas suppliers in order to reuse this capital to expand its electricity supply business. By 2029, the company will invest 43 billion dollars in a variety of Projects, including building clean power generation such as solar and offshore wind farms, while investing in expanding power transmission and distribution infrastructure. These investments should increase Dominion’s earnings per share by 5% to 7% annually.

Dominion plans to maintain its rising profits to support its continued growth. Also to make the dividend more sustainable in the long term by continuously reducing the payout ratio. As soon as the company Target level in the 60%, the company plans to resume dividend growth.

With a yield of 5% and earnings growth of more than 5%, Dominion already has the potential to deliver double-digit annual total returns in the coming years. However, a sell-off would allow investors to potentially Buy stocks at a lower value and higher yield, which could increase your returns in the subsequent recovery.

Steady growth in sight

Brookfield Infrastructure’s dividend currently yields more than 4%, and the company plans to increase this payout by 5% to 9% annually in the coming years.

Several factors support this view. The company derives 90% of its revenue from regulated rate structures or long-term contracts, with 85% either linked to or protected from inflation. Given the continuously rising inflation, Brookfield expects its Funds from operating activities (FFO) per share will rise by 3 to 4% annually due to inflation-related interest rate increases alone.

At the same time, the company expects volume growth as global economic growth continues to grow to add an additional 1 to 2 percent to its earnings each year. In addition, Brookfield is investing heavily in capital projects on its global infrastructure platforms, which should increase its FFO per share by an additional 2 to 3 percent each year.

This trio of organic growth drivers alone could advance the dividend increase plan. However, Brookfield expects its active capital recycling strategy to increase the FFO growth rate in The double digits. The company regularly sells outsourced assets and uses the cash to finance value-enhancing acquisitions.

Adding the high dividend yield to the rapid growth rate, Brookfield could light generate annual total returns in the mid-teens. A sell-off could allow investors to buy shares even cheaper and secure a higher return and larger Upside potential from a future recovery.

Taking advantage of a sale could increase your income and returns potential

Dominion and Brookfield Infrastructure already offer compelling total return potential, driven by their high dividends and visible earnings growth profiles. However, a sell-off could offer the opportunity to buy these dividend stocks at lower prices, allowing you to earn an even more attractive yield. This higher income stream would increase your overall return. In addition, you would have even more upside potential if stocks recover from their decline.

For this reason, both are great stocks to add to your Sale Monitor your list now so you can take advantage of the next unexpected market crash.

Matt DiLallo holds positions in Brookfield Infrastructure Corporation and Brookfield Infrastructure Partners. The Motley Fool recommends Brookfield Infrastructure Partners and Dominion Energy. The Motley Fool has a disclosure policy.

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