3 magnificent dividend shares I’d buy in the FTSE sell-off

At FTSE 100 The index has suffered a steep tumble in recent days. But I think it could be an opportunity to buy quality dividend stocks at a discount.

Major indexes fell amid fears of a banking crisis that threatens to devastate the economy. After the collapse of Silicon Valley Bank over the weekend, investors are worried about the potential contagion spreading to other banks.

Whether these fears are warranted or not, some dividend stocks are looking very good right now.

I can see some stocks that are currently paying dividends of over 7%. And that’s where I’ll focus my search.

A fearful market

Warren Buffett famously said:Fear when others are greedy, and greed when others are afraid.” With a clear drop in many Footsie shares recently, there is certainly a sense of fear around.

Often the best opportunities to buy stocks arise when they are least comfortable. Mr. Market sometimes pushes stock prices lower for irrational or emotional reasons. This can lead to opportunities to buy stocks at a discount.

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One dividend stock that has fallen sharply recently is The Phoenix Group (LSE: PHNX). Changes in stock prices have resulted in returns of up to 9%.

This is the second highest dividend yield in the FTSE 100. This is a great opportunity to earn solid passive income.

But it is important not to rely only on high results. Dividends are not guaranteed and may be cut or delayed if business fundamentals decline.

That said, Phoenix recently increased its dividend. And it has been paying continuously for 14 years. With a dividend cap of 1.5, I’m sure there’s enough cash flow to pay for it.

Finally, in the Spring Budget, the Chancellor abolished the age allowance for pension contributions. As a retirement business, I think Phoenix will benefit. If I had the money, I would buy some one of these days.

Defensive options

Next, if some of the market fears are warranted and the economy falls into a challenging period, I would like to have some defensive stocks.

One part of the dividend is Imperial brand (LSE:IMB). The tobacco business is relatively stable, and provides steady cash flow. With a price-to-earnings ratio of just six and a yield of 7.5%, I’d call this a low-dividend share.

The steady stream of profits is more than enough to cover the dividend. And with a double return on capital, I also call it a quality dividend stock.

With a brand that has been established for decades, it has a competitive edge in the market. That said, the tobacco business is often targeted with regulation and can affect health.

Overall though, if I had the money today, I would definitely buy some for the Stocks and Shares ISA as part of a diversified portfolio.

Consistent dividends

Finally, I will buy it too Aviva. Like Phoenix, the recent drop in stock prices has created a great opportunity to buy established income stocks at a discount, in my opinion.

It currently yields 7.6% and has been distributing dividends consistently for over thirty years. Remember that risks in the financial sector can affect insurance companies. Overall though, the company appears to be on track to deliver on its financial targets.