Nasdaq Bear Market: 3 High-Yield Dividend Stocks You’ll Regret not Buying on the Dip

Nasdaq Bear Market: 3 High-Yield Dividend Stocks You'll Regret not Buying on the Dip

A more than 20% decline in the Nasdaq is your open invitation to buy these income stocks, which are yielding between 4% and 11.2%.

For the past few months, Wall Street and the investing community have been reminded that stocks can go down, too.

Following the strongest bounce back from a bear market bottom in history, all three major U.S. indexes are, once again, in correction territory. The 125-year-old Dow Jones Industrial Average and benchmark S&P 500 are lower by more than 10%, while the growth-dependent Nasdaq Composite has entered a bear market (i.e., a decline of at least 20%). Image source: Getty Images. While the velocity of stock market declines can be scary at times, especially for the more-volatile Nasdaq Composite, history has shown time and again that buying high-quality stocks during corrections and bear markets is a smart move. After all, every notable decline in the market throughout history has eventually been put into the back seat by a bull market rally.

The big question is: Which stocks to buy on the dip? High-yield income stocks can be your golden ticket to riches

Last week, I offered my take on a trio of growth stocks that looked ripe for the picking. This week I’ll turn your attention to three high-yield dividend stocks (i.e. yields 4% or above) you’ll regret not buying on the dip.

Why dividend stocks? The simple answer is that they have a rich history of outperforming companies that don’t pay dividends . Even though recency bias would lead most people to believe that growth stocks are a superior choice to dividend stocks, longer-term data has shown the opposite to be true.

A 2013 report from J.P. Morgan Asset Management (a division of JPMorgan Chase ) compared the performance of stocks that initiated and grew their payouts over four decades (1972-2012) to stocks that didn’t pay a dividend. The end result was an average annual gain of 9.5% for the dividend stocks and a meager 1.6% average annual gain for those that didn’t pay dividends.

Because dividend stocks are often profitable, time-tested, and have transparent long-term outlooks, they’re just the type of companies we’d expect to increase in value over time.

With the Nasdaq firmly in a bear market, this high-yield dividend stock trio is begging to be bought. Image source: Getty Images. Walgreens Boots Alliance: 4% yield

The first high-yield income stock you’ll be kicking yourself for not buying on this bear market dip is pharmacy chain Walgreens Boots Alliance ( WBA -0.25% ). Shares of the company have declined as much as 20% from their early-year high.

In general, healthcare stocks are a smart place to put your cash to work during uncertain times. Since we can’t control when we get sick or what ailment(s) we develop, there’s always a steady demand for prescription drugs, medical devices, and healthcare services.

But in Walgreens’ case, the company was hurt by slower foot traffic into its stores from the pandemic. With lockdowns seemingly a thing of the past and most of the country on a path to a full reopening, the chain’s temporary underperformance is your opportunity to score a great deal on a proven moneymaker.

As a Walgreens Boots Alliance shareholder, I’ve been impressed with management’s multipoint turnaround strategy that emphasizes higher margins and generating repeat business. The company has shaved more than $2 billion off its annual operating expenses a full year ahead of schedule. At the same time, it’s also investing aggressively in digitization. By promoting direct-to-consumer sales, Walgreen’s should be able to sustainably lift its organic growth.

But what might be most exciting is Walgreens’ partnership with, and investment in, VillageMD. The duo has already opened dozens of full-service clinics and plans to have more than 600 clinics in over 30 U.S. markets by 2025 . Offering physician-staffed clinics should draw repeat customers who become regulars at the company’s higher-margin pharmacy.

With a 4% yield and valued at less than 10 times Wall Street’s forecast earnings for fiscal 2022, Walgreens looks like a no-brainer buy. Image source: Getty Images. Sabra Health Care REIT: 8.7% yield

Speaking of no-brainer opportunities, income investors are likely to regret not snapping up shares of healthcare real estate investment trust (REIT) Sabra Health Care REIT ( SBRA -0.50% ). Shares of the company have declined more than 27% from their 52-week high.

As you might imagine, a company that owns over 400 combined skilled-nursing and senior-housing facilities hasn’t fared well during the pandemic. Senior citizens have proved particularly vulnerable to COVID-19, which sent occupancy rates in the facilities […]

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