5 Best Long-Term Dividend Stocks to Buy Now

Monday's 2% plunge in stocks reminded investors that choppy waters are ahead. But owning the best dividend stocks can offer stability when things get bumpy.

In 2013, JPMorgan Asset Management compared the performance of companies initiating and growing their payouts between 1972 and 2012 to publicly traded companies that didn't pay a dividend over the same stretch.

The result was that dividend-paying stocks averaged an annual return of 9.5%. And non-dividend-paying stocks had an annualized return of just 1.6%.

And during times when U.S. stocks are struggling, dividends provide a peace of mind that comes with knowing you have a steady stream of income.

So, let's take a look at the five best dividend stocks to buy before markets get choppy...

Best Dividend Stock, No. 5: AGNC Investment Corp.

Mortgage real estate investment trusts (REITs) like AGNC Investment Corp. (NASDAQ: AGNC) are in a position to really shine.

These companies borrow money at short-term lending rates and then use it to buy long-term assets that return higher yields, like mortgage-backed securities. By maximizing the difference between long-term yield and the borrowing rate, these companies generate a higher net interest margin.

During the early stages of economic recovery, long-term bond yields rise while short-term bond yields flatten or decline - steepening the yield curve. And when the yield curve steepens alongside flat or lower interest rates from the Fed, that's great for mortgage REITs. That's because they lose value as interest rates increase.

That's exactly where we are now, putting REITs a great spot.

AGNC delivers a strong 9.05% dividend yield and an annual payout of $1.44 per share. It's worth noting that AGNC pays its dividend monthly.

And if you need any more reason to invest in AGNC, the company has averaged a double-digit percentage yield in 11 of the past 12 years.

Best Dividend Stock, No. 4: AT&T Inc.

AT&T Inc. (NYSE: T) is the largest telecommunications company in the world. While the company isn't likely to double by the end of 2021, it will deliver cash into your account every quarter that you own the stock.

Though AT&T will be a smaller company when the spin-off of its media assets is complete, this will make the company more of a pure play on 5G and fiber broadband going forward.

Because of the that, the company is working with homebuilder JBG Smith (NYSE: JBGS) to build a 5G smart city in National Landing, just outside of Washington, D.C. The smart city project will have state-of-the-art 5G coverage all across the area and could be the prototype for future smart cities, offering improved smart car mobility and immersive retail experiences.

AT&T has a reputation for being a boring company, but its 5G push and collaboration on smart cities shows it's anything but.

And you can buy the stock for eight times forward earnings, meaning you're getting AT&T for cheap compared to where analysts expect the stock's value to go, all while sporting a solid 7.6% dividend yield.

Best Dividend Stock, No. 3: Altria Group Inc.

Tobacco stock Altria Group Inc. (NYSE: MO), the company behind the popular Marlboro tobacco brand of cigarettes, might not be what it once was. Despite that, it continues be a favorite of income investors with a yield of 7.4%.

Despite a steady decline in the number of smokers in the United States, Altria's tobacco sales have continued to rise by 10% year over year. That's thanks to the pricing power behind nicotine-containing products. And Altria controls nearly half the cigarette market with Marlboro. That allows the company to raise prices without losing customers, driving its growth.

But Altria isn't just raising prices to achieve better results.

The company has licensed IQOS, a smokeless tobacco system, from Philip Morris International. It also invested $1.8 billion into the Canadian marijuana stock Cronos Group back in 2019. And Altria's cash flow allows the company to pursue a number of opportunities to support and offset any weakness when it comes to its overall cigarette sales.

With Altria, investors are getting a company committed to annual dividend payments of $3.60 and regular share buybacks. This is a wealth-building opportunity for those investors who are willing to stick around for the long haul.

Best Dividend Stock, No. 2: Annaly Capital Management Inc.

We have another mortgage REIT on the list with Annaly Capital Management Inc. (NYSE: NLY). And Annaly is one of the most attractive companies you can invest in right now.

Just like AGNC, Annaly will benefit from the combination of an economic recovery and a steepening yield curve since it usually leads to share price appreciation.

It's worth mentioning that Annaly invests almost exclusively in agency securities. Agency assets are backed by the federal government in the event of default. While having this protection tends to weigh down the yield potential of agency securities, it also allows Annaly to use leverage to increase its profit potential.

Annaly has paid out more than $20 billion in dividends since 2000. And the company has averaged a yield of roughly 10% for over two decades. It's an income stock that has the potential to crush inflation over the long run.

As of Sept. 14, Annaly sports a dividend yield of 10.21% and has an annual payout of $0.88 per share.

Best Dividend Stock, No. 1: Global X Nasdaq 100 Covered Call ETF

The Global X Nasdaq 100 Covered Call ETF (NASDAQ: QYLD) is an ETF on our list of dividend stocks that comes in at No. 1, and for good reason.

The fund tracks the performance of the CBOE Nasdaq-100 BuyWrite V2 Index. Basically, QYLD does all the work out of writing covered calls and invests in the largest companies in the Nasdaq.

There is a catch though. QYLD sacrifices its capital appreciation potential to pay out a double-digit dividend to shareholders.

But when stocks stay flat or drop, owning an income payer like this will add some stability considering that the ETFs total return was 20.99% against the S&P 500's 10.4%.

As of Sept. 21, QYLD has a Morningstar rating of 4 out of 5, and the ETF has a expense ratio of 0.6% - which meets our criteria of being lower than 1%. That makes QYLD a strong ETF to invest in.

So, if you've got extra cash to invest, these high-yield dividend stocks could generate an average yield of 9.1%. That means if you were to invest $10,000 into these dividend stocks collectively, they could net you $9,100 in annual income.

But if you're looking for juicier, more immediate returns, this fintech stock must be just the thing for you...

One Stock to Buy

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Square Inc. (NYSE: SQ) is a fintech leader, and it's one of the hottest in the sector today.

The fintech company has a leg up on the competition when it comes to the payments side of the fintech market. Payments is where the big advances - and big bucks - are.

One of the best parts about Square is that it's all about technological transformation. It's about peer-to-peer payments. The company's mobile-payments platform is about helping individuals start and grow their businesses. Its Cash App service is going to be a one-stop shop for everything related to finance and e-commerce.

And there's an addressable market that's growing, with no end in sight.

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