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Two FTSE 100 dividend stocks I want to buy in the next stock market crash

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With global equity markets at a high level and many FTSE 100 stocks trading at lofty valuations recently, I’ve been following Warren Buffett’s lead and building up a large cash pile. I want to be ready to capitalise if the stock market experiences a correction in the near future.

With that in mind, here’s a look at two FTSE 100 dividend stocks I’d like to buy when the market next takes a hit.

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Smith & Nephew

One company I’ve had my eye on for a while is Smith & Nephew (LSE: SN), the healthcare company which specialises in hip and knee implants and advanced wound management solutions.

The reason I like the look of this FTSE 100 company is I see it as the ideal way to capitalise on the world’s ageing population. According to data from the United Nations, the number of people aged 60 and older across the world is set to double in the next 30 years. Given that our bodies tend to break down as we age, demand for Smith & Nephew’s products is likely to remain robust over the next few decades, in my view.

In addition, I like the fact Smith & Nephew is a global company with a healthy level of exposure to the world’s emerging markets. Rising wealth across Asia and India in the years ahead should also provide a nice tailwind for growth. 

Turning to the valuation, SN shares currently trade on a forward-looking P/E ratio of around 21 using next year’s forecast earnings. That’s not an outrageous valuation however. I reckon that, with a little patience, I can pick the stock up cheaper than that. Ideally, I’d like to get in at around the 1,500p level.

InterContinental Hotels Group

Another FTSE 100 dividend stock I’ve my eye on right now is InterContinental Hotels Group (LSE: IHG). The sector giant owns a top portfolio of brands including InterContinental, Holiday Inn, and Kimpton. Globally, the group has nearly 5,800 hotels in its portfolio.

Like Smith & Nephew, IHG looks set to benefit from a number of powerful demographic trends in the years ahead. One such trend is the retirement of the Baby Boomers (who are ending work in their droves). Given that retirees generally like to travel, I think leading companies in the tourism industry such as IHG should do well.

Source: IHG

Aside from the fact the company is poised to capitalise on a number of big trends, I also like IHG’s business model. By operating the majority of its hotels through a franchise model, it keeps capital expenditure down and enables the group to reinvest in growth opportunities.

IHG shares currently trade on a forward-looking P/E of around 20 using next year’s forecast earnings. Again, that’s not a crazy valuation, yet ideally I’d like to acquire the stock at a slightly lower multiple.

When markets pull back, this is a stock I’ll be watching closely.

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Edward Sheldon owns no shares mentioned. The Motley Fool UK has recommended InterContinental Hotels Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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