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3 Fantastic Dividend Stocks to Buy When the Market Crashes Again

By Keith Speights – Jul 19, 2020 at 6:45AM

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Note that it's "when" and not "if."

Yes, the stock market will crash again. That's a 100% certainty. What isn't so certain is when it will happen. But you can bet on another market crash coming down the road, perhaps even this year.

If you do take that bet, though, make sure you hold some cash to the side. Major market downturns create excellent buying opportunities. You can especially scoop up shares of dividend stocks at lower prices and lock in higher yields. Here are three fantastic dividend stocks to buy when the market crashes again.

Bag with "dividends" printed on it underneath an umbrella

Image source: Getty Images.

Brookfield Infrastructure 

You have a couple of alternatives with Brookfield Infrastructure. Brookfield Infrastructure Partners (BIP -2.01%) is a limited partnership (LP) that offers a juicy dividend yield of close to 4.5%. Earlier this year, the company gave investors a gift by creating a new entity, Brookfield Infrastructure Corporation (BIPC -1.51%). They're economically equivalent and pay the same dividend. But because of its share price, Brookfield Infrastructure Corporation's dividend yield stands at close to 4.1%.

What's the difference between the two (aside from the small difference in dividend yields)? They have different tax implications. Also, some retirement accounts and indexes don't allow LPs. Otherwise, the same reasons for buying apply to both stocks. And there are plenty of reasons to invest in either Brookfield Infrastructure entity in addition to the attractive dividend yield.

Brookfield Infrastructure is remarkably diversified. It owns infrastructure assets across multiple sectors -- data, energy, transport, and utilities. These assets are also diversified geographically across four regions, with no region generating more than 30% of total cash flow. This diversification makes the company resilient to macroeconomic headwinds. 

Don't think Brookfield Infrastructure is just a boring low-growth stock, though. The company continually reevaluates its assets, selling lower-performing ones and reinvesting in more promising ones. Whenever the market plunges again, an investment in either of the Brookfield Infrastructure stocks will give you solid long-term growth prospects plus a strong dividend, which should add up to market-beating total returns. 

Brookfield Renewable Partners

Brookfield Renewable Partners (BEP -0.93%) is a sibling of Brookfield Infrastructure. The companies are managed by the same partner, Brookfield Asset Managers. Brookfield Renewable is also a limited partnership. And it pays a strong dividend that currently yields close to 4.1%.

As its name hints, Brookfield Renewable focuses on renewable energy. It owns hydroelectric, solar, and wind power-generation facilities plus energy storage facilities. Roughly 75% of the company's funds from operations (FFO) has been made from generating hydroelectric power in the past. But Brookfield Renewable is beefing up its solar and wind assets through an acquisition of TerraForm.

Fossil-fuel energy is going the way of the dinosaurs (which, by the way, didn't produce fossil fuels -- they come from dead plants). That's not happening only because of environmental concerns. Renewable energy sources such as solar and wind are already more cost-effective than natural gas and other fossil fuels.

Brookfield Renewable thinks that it can deliver average annual returns of at least 12% and up to 15%. If you get a chance to buy the stock at a discount during a market crash, your returns would likely be even higher. 


At last, we have a great dividend stock to buy in the next market crash that isn't named Brookfield. AbbVie (ABBV -0.48%) offers a dividend yield of 4.7% -- the highest of the group. It's also a Dividend Aristocrat with 47 consecutive years of dividend increases under its belt.

I'll admit that AbbVie might seem like somewhat riskier than the Brookfield companies. The company relies heavily on immunology drug Humira. Within the next three years, Humira's sales will begin to fall significantly as biosimilar rivals enter the U.S. market.

However, AbbVie seems to have a pretty good plan to cope with the anticipated sales decline for Humira. The company has built up an impressive roster with fast-rising stars including blood cancer drugs Imbruvica and Venclexta and new immunology drugs Rinvoq and Skyrizi.

In addition, AbbVie's recent acquisition of Allergan gives it additional cash flow that makes it less dependent on Humira. Allergan's blockbuster Botox franchise is its crown jewel. AbbVie also picked up new products with great potential, including antipsychotic drug Vraylar. The pharma stock isn't likely to deliver tremendous growth over the next few years, but it's one that income-seeking investors might want to snag when the next market downturn comes.

Keith Speights owns shares of AbbVie, Brookfield Infrastructure, Brookfield Infrastructure Partners, and Brookfield Renewable Partners L.P. The Motley Fool owns shares of and recommends Brookfield Asset Management. The Motley Fool recommends Brookfield Infrastructure and Brookfield Infrastructure Partners. The Motley Fool has a disclosure policy.

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