It's always good to keep a list of stocks that you're interested in buying at the ready. You may not be quite ready to buy them right now, but being prepared if stock prices dip can score you a nice bargain. Two stocks that belong on your watchlist are Whirlpool (WHR 0.74%) and International Paper (IP -1.73%).

Whirlpool

Demand for big-ticket appliances ultimately depends on the state of the economy and the housing market. Given the current economic conditions, it's not surprising that sales are slipping.

You only have to look at recent results from Home Depot, Lowe's, and Best Buy to know that consumers are being more cautious when it comes to home improvement. Home Depot's comparable sales sank 4.5% in the first quarter; Lowe's suffered a 4.3% comparable sales decline ; and Best Buy reported that domestic appliance sales tumbled by 15.5%.

None of this is good news for appliance giant Whirlpool. The company reported its own 5.5% sales decline in the first quarter, and adjusted profits were nearly cut in half. For the full year, Whirlpool expects a slight 1% to 2% sales decline, and the company slashed its outlook for GAAP earnings per share to a range of $13 to $15.

Whirlpool's business is cyclical, and it's easy to be pessimistic toward the bottom of the cycle. While it's important to remember that Whirlpool's earnings could decline further, and likely will if global economies enter recession, the stock looks like a good deal.

Based on the low end of the company's earnings guidance, Whirlpool trades for about 10 times earnings. The stock looks reasonably priced based on other measures as well. The price-to-sales ratio sits below 0.4, lower than it's been for much of the past decade, and the dividend yield has only briefly been higher than it is now.

Again, things are probably going to get worse before they get better, and these valuation ratios can change drastically if earnings or sales take a dive. But with Whirlpool stock down almost 50% since peaking, it doesn't look like a bad time to pick up some shares.

International Paper

Like Whirlpool, packaging giant International Paper is at the mercy of the economy. Sales slumped 4% year over year in the first quarter, with the industrial packaging segment particularly weak. Customers are paring down their own inventories, which is hurting demand and pricing.

Adjusted profits dipped slightly, with cost-cutting efforts offsetting some of the revenue decline. The company found $65 million in savings in the first quarter as part of its Building a Better IP set of initiatives.

International Paper is a slow-growing company under the best-case scenario, so it certainly doesn't make sense to pay a premium price for the stock. Shares have been beaten down over the past couple of years, shedding more than 50% of their value since peaking. Based on the average analyst estimate for 2023 earnings, the stock trades for about 12 times earnings.

International Paper also pays a nice dividend, although it may come under pressure in a recession. The stock currently yields just over 6%. The dividend consumed $162 million of cash in the first quarter, compared to adjusted earnings of $185 million and free cash flow, excluding a one-off payment to the IRS, of $197 million. The dividend is still covered by earnings and adjusted free cash flow, but that may not remain true if demand weakens further.

A reasonable valuation makes International Paper a stock to consider, although the risks shouldn't be ignored.