First, it's important to mention that 20,000 is a completely arbitrary number for the Dow Jones Industrial Average. However, it is a psychological milestone, and if it's achieved in the coming hours, days, or weeks, it will mean that the index has risen by nearly 15% in 2016. Now, I'm not saying the market will pull back after reaching 20,000, but if it does, dividend stocks tend to do better than non-dividend counterparts in corrections. Here are two that look attractive right now.

Image source: Getty Images.

Those big orange buildings

The real estate sector has underperformed in 2016, and leading self-storage REIT Public Storage (NYSE:PSA) has done worse than most of its peers. With the stock now down 12% for the year, it's worth a look for long-term investors.

You probably know Public Storage's product -- those big orange self-storage buildings in almost every part of the United States. What you may not know, though, is what an attractive business self-storage is, and what an attractive company Public Storage is.

For one thing, the storage business is an inexpensive one to run. Storage facilities require less ongoing maintenance and have lower operating costs than most other types of real estate. In fact, Public Storage has said that it could break even with just 30% occupancy. Its properties are currently over 95% full -- how's that for a margin of safety?

Public Storage has some qualities long-term dividend investors should love. First of all, it is the dominant leader in its industry. Public Storage is larger than its next three publicly traded competitors combined. Also, the company carries an extremely low debt load. Public Storage had virtually no debt until recently, but management decided to take advantage of historically low interest rates and issue a modest amount of debt.

Public Storage pays a 3.7% dividend yield as of this writing, and has produced a total return of 1,540% over the past 20 years (15% annualized). With positive industry trends and an ever-expanding business, there's no reason to believe the dividend will continue to grow and the stock will continue to outperform.

This high-dividend bank stock is on sale

In a year when companies like Bank of America and Citigroup are up by 35% and 17%, respectively, why is New York Community Bancorp (NYSE:NYCB) up by less than 3%?

Simply put, investors were not big fans of the company's proposed merger with Astoria Financial (NYSE:AF) for a few reasons. You can read an extensive discussion here, but to sum it up:

  • Because NYCB is currently at $49.5 billion in assets, the deal would have pushed it over the important $50 billion regulatory threshold. Not only would this mean that the Federal Reserve would need to approve all future dividends, but it would add to the bank's regulatory compliance expenses as well.
  • Astoria is nowhere near as efficient as NYCB. While NYCB has historically operated at one of the lowest efficiency ratios in the business, this is not the case for Astoria. In fact, its 70%-plus efficiency ratio is rather high.
  • NYCB cut its dividend shortly after the merger announcement, and further cuts have been widely speculated.

Both banks recently agreed to terminate their agreement to merge, effective Jan. 1, 2017. Now, New York Community Bancorp can continue doing what it does best -- focusing on its niche market of financing rent-controlled New York apartment buildings.

In addition, the Trump presidency could be good news for NYCB, especially if Trump follows through with his promise to lower regulations. If this happens, the $50 billion asset ceiling investors are so afraid of may not matter quite as much. Plus, like all banks, NYCB could benefit from the higher interest rates Trump's economic growth plans are expected to produce.

In a nutshell, I own NYCB in my own portfolio for its juicy dividend (currently 4.1%) and excellent track record in a lucrative niche market. I'm considering adding to my position now, especially since the stock has dropped since the merger agreement was scrapped.

Just to clarify...

To be clear, I'm not saying that you should wait for the Dow to hit 20,000 to buy these stocks -- I certainly didn't. I bought both stocks when the index was still in the 17,000 range. Rather, my point is that these two stocks should do well over the coming years no matter what number is associated with the Dow, and that they are especially good choices when the rest of the market starts to look expensive.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.