There was a brief resurgence of volatility in the equity markets earlier this month, a reminder that sell-offs can happen at any time and without warning. The speed of the recent market sell-off and subsequent recovery also showed that it’s good to have a list of stocks you would buy during a sell-off ready to pounce when the opportunity arises.

Brookfield Infrastructure (NYSE: BIPC)(NYSE: BIP), Nucor (NYSE: NUE)And NextEra Energy (NYSE: NEE) are great stocks to buy during market sell-offs. Here’s why some of our Fool.com contributors think investors should buy them on a future decline.

A constant growth driver

Neha Chamaria (Brookfield Infrastructure: Selling off is never easy; but when high-potential stocks fall, smart investors know it’s an opportunity to snap up shares while there’s still time. Brookfield Infrastructure is one such stock that you’ll want to buy on any dip for three reasons: (1) its assets can generate stable cash flows, (2) it’s growing steadily, and (3) management is focused on dividend growth.

To put that in numbers, Brookfield Infrastructure grew its funds from operations (FFO) by nearly 11% in the first six months of 2024. The company acquires and operates regulated assets in sectors such as utilities, transportation, midstream energy and data infrastructure, and provides services under long-term contracts. This means it can generate stable cash flows even in difficult times. In between, it regularly reshuffles its portfolio to sell mature assets and reinvest the proceeds in projects with better return potential.

Brookfield Infrastructure sold $1.4 billion worth of assets in the first half of 2024 and expects to raise another $2.5 billion in the coming quarters. The company is already fully deploying the cash and has secured or completed seven follow-on acquisitions so far in 2024 with a total enterprise value of nearly $4 billion.

Brookfield Infrastructure has a lot of growth potential. Over the long term, the company is targeting 10% FFO per share and 5% to 9% dividend growth per share. Since the partnership’s shares also yield 5.4% (shares of the twin company yield 4.4%), you could earn double-digit annual returns on this stock even in tough times.

Nucor is getting better and better

Reuben Gregg Brewer (Nucor): The steel industry is cyclical and has struggled in recent years with periods in which the US steel market has been flooded with cheap imports. This has resulted in large price fluctuations for industry giant Nucor. Although steel demand is expected to remain generally strong due to a wave of construction in the industrial (nearshoring) and technology (data centre) sectors, steel imports have risen again. This has put pressure on sales and prices after a series of very strong years for Nucor.

The bottom line is that Nucor’s financial results are currently trending downward, which is why investors have been selling the steelmaker’s shares, which are now about 30% below their recent high.

NUE data from YCharts

However, this is actually quite normal for Nucor, as the company has experienced numerous declines of at least this magnitude over the past five decades.

However, Nucor has never rested on its laurels, instead focusing on continuous reinvestment in its business through good times and bad. This has included upgrading its existing manufacturing facilities and, more importantly, expanding its manufacturing capacity. One focus has been on creating value-added businesses that allow Nucor to use its own steel to produce higher-margin steel products, such as shelving for data centers and garage doors for industrial properties.

Despite operating in a cyclical industry, Nucor has basically grown in value over time. This has translated into higher share prices over the long term, despite frequent price fluctuations that can be a little difficult to watch at times. But if you can stomach the volatility, buying when Nucor prices are falling has proven to be a great long-term plan.

A powerful wealth creator

Matt DiLallo (NextEra Energy): NextEra Energy has a long history of increasing shareholder value. The utility has increased its earnings by 9% annually over the past decade. That has gave him the fuel to increase the dividend by around 10% annually. This combination of earnings and dividend growth has contributed to the Total return for its investors about the Years:

Image source: NextEra Energy.

Given the company’s ability to deliver above-average growth and earnings, NextEra Energy typically trades at a higher price. This is why there are sell-offs tend to offer a rare opportunity to buy this high-quality stock at a more attractive valuation.

Buying shares at a cheaper price would increase an investor’s chances of earning a high return with NextEra in the futureThe company is already in a great position to increase shareholder value. It expects to grow its earnings per share toward the upper end of its annual target range of 6% to 8% by 2027. It also plans to increase its dividend by about 10%. per year until at least 2026. In the meantime, there is plenty of long-term upside potential from the expected acceleration of electricity demand due to AI data centers and other catalysts.

With a dividend yield of over 2.5% and annual earnings growth of around 8%, NextEra has the potential to deliver double-digit annual total returns from here. Buying shares during a sell-off, on the other hand, would lock in a higher dividend yield and a lower valuation, improving an investor’s ability to generate strong total returns over the long term.

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Matt DiLallo owns shares of Brookfield Infrastructure Corporation, Brookfield Infrastructure Partners, and NextEra Energy. Neha Chamaria does not own any of the stocks mentioned. Reuben Gregg Brewer owns shares of Nucor. The Motley Fool owns shares of and recommends NextEra Energy. The Motley Fool recommends Brookfield Infrastructure Partners. The Motley Fool has a disclosure policy.