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With markets down 21% on the year most stocks can be scooped up at a huge discount to where they were trading just a few months ago.
But you have to be careful.
Bear markets tend to squeeze the dumb, speculative money out of the markets - meaning many stocks that were overvalued at the start of 2022 won’t make it back to their pre-bear market levels any time soon.
Example: Tech stocks have taken a beating because there’s so much speculative capital in the sector. It’s not enough to “buy the dip” on the stocks that were hit hardest by the market decline and hope to make 50% or more when markets hit bottom - because there’s no guarantee that buyers are coming back to these stocks…
So you have to be smart about your choices in 2022: the best course is to find stocks that attract capital in a flight to safety during tough times, but still project upside.
And if you can get paid to own them, even better…
Because right now, high-yield stocks are beating the broader indices. Take a look…
This is a comparison of the S&P 500 (the red area) and the SPDR Portfolio S&P 500 High Dividend ETF.
High dividend stocks from the S&P 500 are beating the broader index by 15 percentage points - and a few select stocks are doing a lot better than that.
Here are three great dividend stocks to buy on the dip…
Dividend Dip Stock No. 1: Atmos Energy Corp. (ATO)
Atmos Energy Corp. (ATO) operates through two segments, Distribution, and Pipeline and Storage. The Distribution segment is involved in the regulated natural gas distribution and related sales operations in eight states. This segment distributes natural gas to approximately three million residential, commercial, public authority, and industrial customers.
Atmos will benefit from the massive 700% surge in natgas prices rippling through the economy as a result of the Russian invasion of Ukraine.
Right now, the stock is up 4.5% on the year, and should benefit even more in the coming weeks with natgas prices going crazy. And getting paid 2.36% at current prices doesn’t hurt, either.
Dividend Dip Stock No. 2: Citigroup Inc. (C)
The Fed is committed to raising rates throughout the balance of 2022. And the sector that’s going to benefit the most from a rising rate environment is, of course, financials. And big institutions like Citigroup are going to benefit.
During the company’s Q1 Earnings call back in April, CEO Jane Fraser said “We continue to see the health and resilience of the U.S. consumer through our cost of credit and their payment rates. We had good engagement in key drivers such as cards loan growth and vigorous purchase sales growth, so we like where this business is headed.”
Citigroup is down this year, but still beating the broader markets. Take a look…
And of course, getting paid 4.35% at current prices will help your bottom line no matter what happens to the broader markets.
Dividend Dip Stock No. 3: Iron Mountain Inc. (IRM)
Iron Mountain Inc. (IRM) is a global leader in storage and information management solutions. The company has a client list of over 225,000, with a real estate network of more than 90 million square feet across approximately 1,450 facilities in approximately 50 countries around the globe. Iron Mountain stores and protects billions of valued assets, including critical business information, highly sensitive data, and cultural and historical artifacts.
But we bring it to your attention for two reasons…
First, while IRM stock is down -5.73% on the year, it’s still outperforming the markets by 15 points.
This means when bulls come back to the markets, IRM has some potential upside in terms of capital appreciation…
Second, it yields a fat 5.02% at current prices, giving shareholders some cash in their pocket while they wait for markets to rebound.
Read this Before You “Buy The Dip”
Some investors will tell you to buy the dip on a great stock no matter what.
That’s fine if you’re a buy-and-hold type, someone who wants to build large stock positions over a number of years and watch them grow.
Buying more shares at lower prices is a great way to reduce your overall cost.
But what if you’re a trader - looking to make the most profit in the least amount of time?
Blindly buying the dip can lead you to a portfolio full of losers in short order…
The best way to avoid going upside in this market is to trade Money Zones - because they will tell you when the dip is going to lead to a reversal of the trend - and hand you profit when a stock makes a move to the upside.
I know we say this a lot at Stock Navigators - but that’s because the Money Zone Method flat-out works.
Chief Market Strategist Tom Luong uses Money Zones with every single trade - and they helped him book over $1 million in profits last year...
If you want to learn how you can harness the power of Money Zones to level up your trading game, just click here.
Stock Navigators has one mission - to help people improve their lives via trading. And it's all made possibly by our team of stay-at-home day traders who provide the most up-to-date analysis every single day. With over twenty years of combined trading experience, Stock Navigators helps you stay on top of the market.
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