3 Stocks to Load Up on When the Stock Market Sells Off

Volatility has returned to the stock market in recent weeks, pushing the S&P 500 down more than 5% below its all-time high at one point. While that’s not a major sell-off, it’s the biggest decline in almost a year. 

Bumps in the road like this are always a good reminder that sell-offs can come out of nowhere, which is why investors need to be prepared. One way to do that is to make a list of stocks you would want to buy the next time the market takes a dive. 

With that in mind, we asked three Fool.com contributors what stocks they think investors should consider loading up on during the next big sell-off. Topping their lists were Brookfield Renewable Partners’ (NYSE:BEP), Waste Management (NYSE:WM), and Nucor (NYSE:NUE). 

Reuben Gregg Brewer (Brookfield Renewable Partners): When the markets started to tank in 2020 Brookfield Renewable Partners’ units fell around 45%. Theyh quickly started to gain back some ground, hitting a new high-water mark in early 2021 before starting to drop again. The stock is down about 25% from that peak, but still looks historically expensive. If there’s a market sell-off there’s likely further room to fall, even after the current drop.

But there’s a lot to like about Brookfield Renewable Partners, a master limited partnership, and its younger twin, corporate shares Brookfield Renewable Corp. (NYSE:BEPC). Roughly 50% of its revenue come from highly stable hydroelectric power. The rest is a mix of newer technologies, like solar and wind. Put simply, it’s using the hydropower foundation to grow in newer areas. It’s a great portfolio balance that distinguishes Brookfield Renewable from its peers.

BEP Dividend Yield data by YCharts

Then there’s the dividend. The yield today is historically modest at roughly 3.2%, but the distribution has been increased annually for a decade (adjusting for the spin off of Brookfield Renewable Corp and a 3-for-2 stock split, both of which occurred in 2020). The annualized rate of increase over that span is a solid 6%. And management believes the growth can support 5% to 9% distribution growth for the foreseeable future. If the stock sold off, thus upping the yield, it would be a great way for income investors to add some renewable power to their portfolios. A 6% yield would be pretty incredible, but anything above 5% would probably be a good entry point given the growth potential in the renewable power space today.

A great dumpster diving stock

Matt DiLallo (Waste Management): Stock market sell-offs are often great opportunities for long-term investors. During a market panic, investors will often sell high-quality companies to raise cash to cover a margin call or reduce their exposure to the stock market. Because of that, investors with money to spare can scoop up some high-quality stocks that others are discarding.

One great stock to consider loading up on during the next market meltdown is Waste Management….