In the event of a stock market crash, Coca-Cola, Procter & Gamble, and Waste Management are three dividend stocks that investors might consider buying. These companies have durable businesses that generate substantial cash flow even in challenging economic conditions. Coca-Cola, for instance, reported a 7% revenue growth in the third quarter, driven by volume growth and pricing power. Procter & Gamble, meanwhile, saw a 4% increase in net sales but faced headwinds from commodity costs. Waste Management delivered a 6.3% revenue increase and robust cash flows, thanks to its essential services.
Despite their strong fundamentals, the current valuations of these stocks limit their investment appeal. Coca-Cola trades at nearly 30x earnings with a 2.2% dividend yield, while Procter & Gamble is at 24x earnings. Waste Management is priced at 28x earnings with a 1.6% yield. The author would prefer to buy Coca-Cola below $80, Procter & Gamble around $145, and Waste Management near $200 to achieve more attractive long-term returns.
All three companies have impressive dividend-growth track records. Coca-Cola has increased its dividend for 64 straight years, Procter & Gamble for 70 years, and Waste Management for 23 years. However, the author is waiting for better valuations before boosting positions in these stocks. A market downturn could create the opportunity to buy these high-quality companies at more favorable prices.