The S&P 500 Is in Correction Territory: 4 Surefire Stocks to Buy Right Now

It's official! As of the closing bell on March 13, the benchmark S&P 500 (SNPINDEX: ^GSPC), which is comprised of 500 of the most-influential businesses traded on U.S. stock exchanges, had entered correction territory. Since reaching its all-time closing high of 6,144.15 on Feb. 19, it's shed 10.1% of its value, which is just over the arbitrary threshold of a 10% move lower that defines a stock market correction.

Whereas upside catalysts have been abundant for Wall Street for more than two years, the concrete blocks weighing on the S&P 500 at the moment can be whittled down to two factors. First, there's the uncertainty regarding President Donald Trump's use of tariffs, and the historically negative correlation tariffs have brought to Wall Street. The other prevailing concern is the stock market's historically high valuation, dating back 154 years.

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While S&P 500 corrections can be unpredictable and tug on investors' heartstrings, history shows they're the ideal opportunity for investors to put their money to work. Even though we can't concretely predict when downturns will begin, how long they'll last, or where the bottom will be, the closest thing to a guarantee on Wall Street is that its major stock indexes, including the S&P 500, will be higher 20 years from now.

With the S&P 500 home to 500 time-tested businesses, it's the perfect stomping ground to locate amazing deals. What follows are four surefire stocks you can buy right now to take advantage of this correction.

NextEra Energy

The first outstanding stock investors can purchase with confidence as the broad-based S&P 500 dips by double-digits is America's largest electric utility by market cap, NextEra Energy (NYSE: NEE).

When volatility picks up on Wall Street, one of the smartest moves investors can make is to buy into companies whose products and services are viewed as basic necessities. Demand for electricity isn't going to change much from one year to the next, and it's a basic necessity for owners to power their appliances.

Additionally, electric utilities often act as monopolies or duopolies in the areas they service. This means homeowners don't have the ability to shop around for utility providers, thereby leading to consistent operating cash flow in virtually any economic climate.

What's allowed NextEra Energy to stand head-and-shoulders above other utility stocks for more than a decade is its embrace of renewable energy solutions. In the neighborhood of half of its 72 gigawatts of capacity comes from renewable energy, such as wind and solar. Although investing in clean-energy projects hasn't come cheap, the substantially lower electricity generation costs NextEra is now enjoying has sustained a 10% compound annual earnings growth rate over the trailing decade. It's also allowed the company to grow its dividend by around 10% per year.

NextEra Energy's forward price-to-earnings (P/E) ratio of 18 represents a 26% discount to its average forward P/E multiple over the last half-decade.

Image source: Getty Images.

Johnson & Johnson

A second magnificent stock investors would be wise to buy during the S&P 500 correction is healthcare conglomerate Johnson & Johnson (NYSE: JNJ). While J&J's days of flashy growth are long gone, this is a company that had grown its adjusted operating earnings for 35 consecutive years prior to the COVID-19 pandemic.

Similar to utilities, most healthcare stocks benefit from being defensive. Our health doesn't revolve around moves higher or lower in the stock market. Just because the S&P 500 hits a rough patch, it doesn't mean consumers suddenly stop needing medical devices or prescription medicines. J&J's operating performance tends to be consistent year-after-year.

What's really helped Johnson & Johnson is its decisive shift toward novel-drug development. Even though brand-name therapies have a finite period of sales exclusivity, they possess high margins and strong pricing power. J&J has demonstrated a willingness to invest aggressively in internal drug development, partnerships, and acquisitions to continually grow its innovative medicine segment.

Furthermore, Johnson & Johnson offers continuity in key leadership positions. Since its founding in 1886, it's had only 10 CEOs, including current leader Joaquin Duato. The lack of a carousel at the top means important growth initiatives are being seen through from start to finish.

Shares of Johnson & Johnson can be purchased for less than 15 times forecast earnings in 2026, which as of this writing is 8% below its five-year average. To boot, the company appears to be on track to raise its dividend for a 63rd straight year.

AutoZone

A third superb stock that can be purchased with confidence as the S&P 500 tumbles into correction territory is auto parts supplier AutoZone (NYSE: AZO).

The trend is most definitely AutoZone's friend. In May 2024, a report from S&P Global Mobility, a division of S&P Global, noted that the average age of vehicles on U.S. roads was 12.6 years. This is up from an average of 11.1 years in 2012. Drivers are keeping their vehicles longer, which means they're going to rely on auto parts suppliers like AutoZone to keep them running well.

To accommodate vehicles remaining on U.S. roads for an ever-longer period, AutoZone is building out a network of approximately 200 mega hubs, which are stores that will carry up to 110,000 stock keeping units (SKUs). The goal is to center these mega hubs between outlier stores, so the part a customer needs is always within reach.

Perhaps the best thing about AutoZone from an investment perspective is its truly jaw-dropping share repurchase program. Since implementing buybacks in fiscal 1998, the company has retired approximately 16.75 million shares for $37.8 billion. All told, AutoZone's outstanding share count has fallen by 89% from its peak, which has had a meaningfully positive impact on its earnings per share.

Though AutoZone's forward P/E of nearly 21 is higher than its five-year average, the trend is most definitely its friend.

Alphabet

The fourth surefire stock to buy right now with the S&P 500 ending March 13 in correction territory is the cheapest "Magnificent Seven" stock of the group, Alphabet (NASDAQ: GOOGL)(NASDAQ: GOOG). Alphabet is the parent of search engine Google and streaming platform YouTube, among other ventures.

Alphabet is another company where the trend is undeniably its friend. Even though businesses tend to pare back their ad spending during periods of economic and/or stock market turbulence, these vacillations are usually short-lived. Whereas the average recession since the end of World War II has lasted about 10 months, the typical period of economic expansion has stuck around for roughly five years.

During the December-ended quarter, Alphabet brought in 75% of its net sales from advertising. In particular, it remains a near-monopoly force in internet search, with Google accounting for a 90% worldwide monthly share in February. As the undisputed leader in internet search, Alphabet is gong to benefit from lengthy economic expansions and superior ad-pricing power more often than not.

While Google remains Alphabet's foundational operating segment, cloud infrastructure service platform Google Cloud is its biggest long-term growth driver. Incorporating generative artificial intelligence (AI) solutions into the world's No. 3 platform by cloud spending (as of December 2024) should rapidly increase Alphabet's cash flow from this high-margin segment.

Shares of Alphabet can be picked up for less than 16 times forecast earnings in 2026, which is 30% below its trailing-five-year multiple to forward-year earnings.

Should you invest $1,000 in NextEra Energy right now?

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Sean Williams has positions in Alphabet and NextEra Energy. The Motley Fool has positions in and recommends Alphabet, NextEra Energy, and S&P Global. The Motley Fool recommends Johnson & Johnson. The Motley Fool has a disclosure policy.