While investors often covet growth stocks, it's dividend stocks that are usually the heart and soul of any successful long-term portfolio. That's because income stocks bring a host of comparative advantages to the table that can't be beat.

For one, dividend stocks have a history of outperforming their non-dividend-paying counterparts. If you think about the logistics of this, it makes sense. After all, a company is unlikely to continue paying a dividend to its shareholders if it doesn't foresee continued growth and profitability. In effect, a dividend acts like a beacon to alert investors to a time-tested and often profitable business.

A regular payout can also be just what the doctor ordered to calm the nerves of skittish investors. Since stock market corrections are inevitable, it's important to consider the role that dividend payouts can play in helping to partially hedge the often temporary downside brought on by a correction.

A man placing crisp one hundred dollar bills into two outstretched hands.

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And, maybe most important, a regularly paid dividend can be reinvested via a dividend reinvestment plan (Drip) to quickly compound wealth. Rather than simply taking a dividend as a cash payment, Drips allow investors to repurchase more shares of dividend-paying stock with their payout, thereby compounding their future income stream and shares owned. It's the same strategy used by top-tier money managers to build wealth for their clients.

However, dividend stocks can have a dark side, too. Since yield is a function of price, a failing business model or plunging share price can lure income seekers into a trap. That can make it particularly hard for investors to trust beaten-down dividend stocks.

But that's not the case with the following three dividend stocks.

Bristol-Myers Squibb

On a year-to-date basis, shares of Big Pharma Bristol-Myers Squibb (NYSE:BMY) may not look all that bad (down 4%). But over the trailing year, Bristol has seen its share price shrink by nearly 20% and substantially underperform the broader market.

There have been two notable concerns. First, there's the acquisition of Celgene (NASDAQ:CELG), which some on Wall Street worry Bristol-Myers may be overpaying for. Additionally, Bristol-Myers' immunotherapy blockbuster Opdivo has taken a backseat to Merck's Keytruda, raising concerns about future growth prospects. In the meantime, the company's dividend yield has shot up to a healthy 3.3%.

A tipped over prescription bottle next to an ascending stack of generic tablets that are lying atop a messy pile of cash.

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Though this might have the look of a yield trap, it's not. Bristol's acquisition of Celgene, even after the disposition of psoriasis medication Otezla, should give the company a nice shot in the arm of high-growth oncology products. More specifically, Revlimid has proven virtually unstoppable, with volume growth, higher prices, and longer duration of use leading to consistent double-digit annualized sales growth. With generic-drug deals in place, Celgene's blockbuster is protected from a full onslaught of generic competition until the end of January 2026.

Bristol-Myers' core branded drugs are no slouches, either. In the latest quarter, blood thinner Eliquis, and immunotherapies Yervoy and Opdivo, grew by a double-digit percentages from the prior-year quarter.  Many of Bristol's core products have label expansion opportunities, and the company has 37 compounds currently in development, more than half of which are for cancer indications. 

Bristol-Myers Squibb will be delivering big-time profits for years to come, and its recent share price weakness is an opportunity to pick up a solid income stock on the cheap.

Nordstrom

Another downtrodden company that income investors can trust, despite its recent performance, is upscale department store retailer Nordstrom (NYSE:JWN). Shares of Nordstrom have lost 46% on a trailing-year basis.

Like most retailers in 2019, Nordstrom has been contending with executional miscues and increasing competition from online providers. In May, the company really slumped after whiffing on its first-quarter operating results and cutting its full-year guidance for 2019. Though this weakness might make it seem as if the company's 4.6% yield is nothing but a trap, there are three reasons investors should avoid tossing Nordstrom to the wayside.

A young smiling woman holding up a credit card while standing in front of a retail sales rack.

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First of all, this is a company that targets a more affluent clientele. The well-to-do are typically less resistant to hiccups in the U.S. economy than are lower- and middle-income individuals and families. Since we know that contractions and recessions are a natural part of the economic cycle, this places Nordstrom in better shape than most department stores to weather the storm.

Second, Nordstrom has done a historically impressive job of managing its inventory level and avoiding discounts to cheapen its brand. This can lead to occasional top-line hiccups, but it often proves better in the long run for Nordstrom in terms of providing the company with juicier margins.

Third and finally, even though sales have been weaker at its physical stores, e-commerce revenue, which now accounts for about 30% of Nordstrom's sales, grew 7% in the company's most recent quarter. Online retail might be the enemy, but it's also Nordstrom's friend. 

Sporting a 4.6% yield, this is a dividend stock worth plucking from the retail shelf.

Altria Group

A final brand-name company that's been beaten to a pulp of late that should probably find its way onto income-seekers radars is tobacco giant Altria Group (NYSE:MO). Over the trailing year, Altria's shares are down by 33%, thereby erasing tens of billions of dollars in market value.

Altria has been facing a flurry of problems. Adult cigarette smoking rates are at their lowest levels in more than five decades in the United States, which hurts its core tobacco business. Meanwhile, there are clear concerns about mysterious lung illnesses cropping up from vaping. That's a problem when you consider that Altria is a 35% stakeholder in Juul, the most popular vape device in the United States. These concerns have pushed Altria's yield all the way up to 8.3%.

A small pyramid of tobacco cigarettes lying atop a bed of dried tobacco flower.

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Though it's easy to discard tobacco stocks as damaged goods with a flawed business model, that'd ultimately be a mistake. Altria Group has the tools necessary to be a trusted holding for income investors.

Let's remember that nicotine is an addictive chemical, and as a result Altria has little problem passing along higher prices to its customers. Even if adult smoking rates for tobacco cigarettes continue to decline, we haven't seen a tipping point at which consumers pare back their purchasing of tobacco products. Superior pricing power certainly remains in Altria's favor.

Also, don't overlook that Altria has taken a $1.8 billion equity stake in marijuana stock Cronos Group, netting the company a 45% non-diluted stake in the company. Even though their partnership revolves around the potential for cannabis vapes, an area of increased scrutiny at the moment, Altria's equity investment still gives it exposure to one of the fastest growing industries on the planet.

With ongoing research into smokeless alternatives, Altria Group shouldn't be written off. This is a dividend stock that investors can trust.