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The Nasdaq Composite has tumbled in recent weeks. The index is down more than 10% from its peak, which puts it in correction territory (a decline of 10% or more from the high).
Sell-offs like this can be tough to stomach at first. However, I've come to see corrections as buying opportunities, especially for dividend-paying stocks, since yields move in the opposite direction as stock prices. I currently have my eye on three top-notch Nasdaq-listed dividend stocks that I'd like to buy if the index continues its descent: Broadcom (NASDAQ: AVGO), PepsiCo (NASDAQ: PEP), and T. Rowe Price (NASDAQ: TROW). Here's why I'd love to buy more of these high-quality dividend stocks if the Nasdaq slump intensifies.
The dividend growth juggernaut
Broadcom's stock has lost about a quarter of its value from its price peak in the past year. That has pushed the semiconductor and software company's dividend yield down to around 1.3%. That might not look very appealing to income-focused investors at first glance. While it's higher than the dividend yield on the Nasdaq, it's right in line with the S&P 500's dividend yield.
Where Broadcom really shines is in its ability to grow its dividend. The company gave its investors an 11% raise late last year. That extended its dividend growth streak to 14 in a row. The technology company has grown its dividend by a jaw-dropping 8,330% during that period.
Broadcom is in an excellent position to continue growing its dividend. Artificial intelligence (AI) is driving robust demand for its semiconductors (AI revenue was up 220% to $12.2 billion last year). Given the growth still ahead for Broadcom, I'd love to add to my position if shares fall another 10% or so.
Hoping to take another sip of this satisfying income stream
Shares of PepsiCo currently sit about 15% below their 52-week high. However, they've held up relatively well during the Nasdaq's correction phase, as they're roughly flat this year.
Because of that, the beverage and snacking giant's dividend yield has remained around 3.5%. That's a satisfying income stream in the current environment.
PepsiCo has a phenomenal record of increasing its high-yielding dividend. The company recently announced plans to raise its dividend by another 5% later this year. That will mark the 53rd year in a row that it has increased its dividend, keeping it in the elite group of Dividend Kings, companies that have raised their payouts for 50 or more consecutive years.
PepsiCo is in an excellent position to continue increasing its high-yielding dividend. It generates lots of cash, has a strong balance sheet, and is growing its earnings at a healthy rate (it's targeting high-single-digit earnings-per-share growth over the long term). While I'd have no problem buying more shares of PepsiCo at the current level, I'd jump at the chance to add to my position if shares slumped another 10% or so.