History Says a 10%+ Stock Market Correction Is Inevitable Eventually. Here Are 3 Dividend Stocks I'd Buy to Prepare for the Next One.

Since 1945, the U.S. stock market has endured 37 corrections (declines of 10% or more), according to data from MUFG. These 10% declines have historically occurred about every 2.2 years. The last correction happened in April 2025 (Liberation Day), when the market tumbled about 20% from its peak.

While that timing doesn't mean that we're overdue for a downdraft, another correction is inevitable. There's certainly reason to believe it could happen sooner rather than later, as the S&P 500 is at one of its most overvalued levels on record.

Instead of trying to predict when the next correction will occur, I'm preparing my portfolio for that inevitability by investing in high-quality dividend stocks built to deliver durability during downturns. Here are three top dividend stocks I'd buy with correction protection in mind.

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Realty Income

Realty Income (NYSE:O) has outperformed the S&P 500 in 11 of the 13 corrections since its 1994 public market listing. The real estate investment trust (REIT) has declined by only 2.6% on average, compared to a 22.6% average drawdown in the S&P 500. It has a beta of 0.5, implying that it has historically been half as volatile as the S&P 500 (1.0 beta).

A major driver of the REIT's stability is its durable cash flows. It owns a globally diversified portfolio of retail, industrial, gaming, and data center properties secured by long-term net leases with many of the world's leading companies. Over 90% of its retail rent comes from tenants in non-discretionary, service-oriented businesses that have remained resilient across economic cycles. That stable income has supported the REIT's steadily rising monthly dividend (136 increases since 1994). At a 6% yield, it provides a strong base return whether the market is up or down.

Procter & Gamble

Procter & Gamble (NYSE:PG) has one of the most durable businesses in the world. Demand for its leading portfolio of consumer household products -- names like Bounty, Charmin, Crest, and Dawn -- is stable and steadily rising. They've helped support its extremely durable dividend. Procter & Gamble has paid dividends every year since its incorporation in 1890, while raising its payment for the last 70 consecutive years. It's in the elite group of Dividend Kings, companies with 50 or more years of annual dividend increases.

The company generates very durable cash flows ($19.6 billion last year). That allows it to invest in its growth while returning lots of cash to shareholders through dividends ($10.2 billion) and repurchases ($5 billion). While it's facing near-term headwinds from inflation, its long-term objective is to deliver mid- to high-single-digit earnings-per-share growth. Add that to its 3%-yielding dividend, and P&G can provide ballast during a downdraft.

WM

WM (NYSE:WM) also has a very resilient business. Homes and businesses need their garbage and recyclables collected and handled regardless of the economic situation. Meanwhile, healthcare facilities require their medical waste to be securely disposed of, while many businesses need information to be securely destroyed. As North America's leading environmental solutions provider, WM has an unmatched strategic position.

The company turns trash into stable, growing cash flow. That provides it with the funds to grow its business (through acquisitions and strategic expansion investments), return money to shareholders through dividends and buybacks, and maintain its fortress financial profile. WM has raised its dividend for 23 straight years (8.6% compound annual growth rate over the past decade). With a nearly 2% current yield and a beta of 0.56, WM can provide income and lower volatility during a market downturn.

Corrections are a regular occurrence

Stock market corrections happen fairly regularly. While they can be unnerving when they occur, the market typically rallies sharply in the 12 months following the dip. That's why investors shouldn't fear the next correction. Instead, the better plan is to prepare for it by adding more defensive holdings to cushion the blow while still providing strong upside potential in the eventual recovery. Realty Income, Procter & Gamble, and WM are ideal holdings because they generate durable, growing cash flows to support their steadily rising dividends, which have historically made them less volatile. That's why I plan to buy all three as I prepare my portfolio for the next correction.

Matt DiLallo has positions in Realty Income and WM. The Motley Fool has positions in and recommends Realty Income. The Motley Fool recommends WM. The Motley Fool has a disclosure policy.