If you're on the lookout for quality S&P/ASX 200 Index (ASX: XJO) stocks to build a regular annual passive income stream, I believe the recent market retrace offers an excellent entry point.
With the ASX 200 having closed down 0.6% yesterday, the benchmark index is now down 3.8% since the market close last Wednesday, 18 October.
And the three high-yielding ASX 200 dividend stocks that look attractive to me for passive income haven't been immune to the selling pressure.
But that can be a good thing.
You see when a company's share price falls due to external factors – like sticky inflation, rising interest rates and global tensions – those shares tend to come back strongly over the medium to longer term once the external factors resolve themselves.
As they almost inevitably do.
With that said, here are three quality dividend stocks to consider buying on the dip to build that passive income stream.
Three ASX 200 stocks for passive income
Woodside's dividends have rocketed in 2022 and 2023, driven by elevated oil and gas prices. While the yields we're looking at are trailing yields, I believe energy prices are likely to remain on the high end in 2024, which should see Woodside shares continue to deliver market-beating yields.
As for those dividends, Woodside paid a final fully franked dividend of $2.154 per share on 5 April. The ASX 200 energy company paid an interim dividend of $1.243 per share on 28 September.
Or $3.40 per share in passive income over the 12 months.
Now, the Woodside share price closed yesterday at $34.90 a share. That sees the stock down 5.4% since closing at $36.88 a share last Wednesday.
It also means that Woodside shares now trade on a fully franked yield of 9.7%, whereas investors who bought the stock last Wednesday will be earning a yield of 9.2%.
With dividends marching higher over the past three years, JB Hi-Fi counts as a rising star among passive income investors.
The ASX 200 retailer paid an all-time high interim dividend of $1.97 per share on 10 March. The final dividend of $1.15 per share was paid on 8 September.
Or $3.12 per share in passive income over the past 12 months.
At yesterday's closing price of $44.02, that equates to a fully franked yield of 7.2%.
Two weeks ago, on 12 October, JB Hi-Fi shares closed the day trading for $47.43 apiece. Investors who bought shares then will be earning a trailing yield of 6.6%.
Rounding out the list, we have ASX 200 bank stock Australia and New Zealand Banking Group Ltd (ASX: ANZ).
ANZ paid a final dividend of 74 cents per share on 15 December and an interim dividend of 81 cents per share in July.
Or $1.55 a share in passive income for the 12 months.
At yesterday's closing price of $24.79 a share, that equates to a fully franked yield of 6.3%.
Investors who bought the bank stock last Wednesday, when shares closed at $25.82, will be earning a yield of 6.0%.
That's the type of yield outperformance investors can get when hunting for quality ASX 200 passive income stocks during a broader market retrace.