4 Strong Dividend Stocks to Buy if the Market Sells Off Again

Dividend stocks are likely to outperform given the Fed's determination to keep rates low. Additionally, their income streams are even more attractive in a volatile environment with stocks likely to see weakness with case counts rising. VZ, PFE, SCCO, and GIS are four dividend stocks to consider.

The stock market is likely to be volatile with rapidly rising coronavirus case counts which are leading to local lockdowns and restrictions on activity. Already, high-frequency data is showing that people are going out and spending less.

However, weakness is likely to be a buying opportunity, especially with positive vaccine news. Further, lockdowns also increase the odds of more fiscal stimulus being passed under a new administration.

Below, we highlight four strong dividend stocks every investor should seriously consider if the market dips in the weeks and months ahead: Verizon Communications (VZ), Pfizer, Inc. (PFE), Southern Copper Corporation (SCCO), and General Mills (GIS).

Verizon Communications (VZ)

VZ offers a dividend of over 4%. Add in the fact that this tech stock has the potential to spike as a result of 5G and you have all the more reason to invest in the stock. From smartphones to Fios internet and more, VZ is at the forefront of wireless tech and data.

VZ has flawless POWR Ratings highlighted by "A" grades in the Peer Grade, Industry Rank, Buy & Hold Grade, and Trade Grade components. VZ is ranked first of 25 stocks in the Telecom - Domestic space.

The top analysts anticipate VZ will hit the low-to-mid $60s soon, meaning it should pop between 3% and 5%. VZ has a relatively low forward P/E ratio of 12.5.

The masses will prove even more reliant on VZ's wireless services in the months ahead as the pandemic plays out. Scoop up VZ today, look forward to your annual dividend and hold onto this gem for the long haul.

Pfizer, Inc. (PFE)

PFE has been in the news of late as its coronavirus vaccine appears to kill the virus at a high clip. Furthermore, PFE has nearly a dozen more blockbuster products in its arsenal. In short, PFE’s drug pipeline is primed and ready to pump for years or even decades to come.

PFE has fantastic POWR Ratings with "A" grades in the Peer Grade and Trade Grade components. PFE is ranked 16th of 240 publicly traded companies in the Medical - Pharmaceuticals space. The top analysts insist PFE is underpriced, predicting a rise all the way to $41.42, meaning there is nearly 20% upside to go.

PFE still has a reasonable forward P/E ratio of 13.06, indicating the stock is slightly undervalued. However, if PFE's vaccine emerges as the best of the bunch, the stock will likely spike to the $50 to $60 level or even higher.

Look for PFE to return to its pre-COVID price around $40 in the months ahead. If you still aren’t convinced PFE is a solid investment, look no further than its tempting 4.07% dividend.

Southern Copper Corporation (SCCO)

If you are looking for a haven amidst the potential second round of the coronavirus and ensuing economic contraction, consider precious metals stocks such as SCCO. SCCO’s business includes mining, smelting, refining and exploring. The company’s primary focus is on copper yet it also mines minerals throughout South America.

The POWR Ratings show SCCO has "A" grades in the Peer Grade, Buy & Hold Grade and Trade Grade components. Furthermore, SCCO is ranked second of 33 in the Industrials - Metals category.

China's rapid bounce back combined with the reduction in copper supply has helped SCCO increase more than 14% in a month. SCCO provides a dividend of 3.60%, making it all the more enticing.

General Mills (GIS)

Though food companies rarely have the same growth rate as tech companies, they are solid plays during economic recessions simply because the demand for the value offering is unwavering. GIS makes and markets some of the world’s most popular food brands. All in all, GIS has more than 100 brands sold in supermarkets across the globe.

The POWR Ratings reveal GIS has an "A" grade in the Buy & Hold and Trade Grade components along with "B" grades in the Industry Rank and Peer Grade components. GIS is ranked 11th of nearly 60 stocks in the Food Makers category.

GIS has a forward P/E ratio under 16 and a dividend of 3.33%. The analysts are bullish on GIS, setting an average price target above $65, meaning the stock is likely to rise 6%-7%.

Scoop up this stock and you will sleep easy at night regardless of whether the pandemic and economy worsen.

Want More Great Investing Ideas?

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VZ shares fell $0.02 (-0.03%) in premarket trading Thursday. Year-to-date, VZ has gained 2.50%, versus a 12.15% rise in the benchmark S&P 500 index during the same period.

About the Author: Patrick Ryan

Patrick Ryan has more than a dozen years of investing experience with a focus on information technology, consumer and entertainment sectors. In addition to working for StockNews, Patrick has also written for Wealth Authority and Fallon Wealth Management.


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