There's never a bad time to buy top dividend stocks for your retirement portfolio. But when a short-term setback sends a good company's share price downward -- and its dividend yield upward -- that can turn a good long-term buy into a great long-term buy. 

Three companies that have been hit by such setbacks are Royal Dutch Shell (RDS.A) (RDS.B)ExxonMobil (XOM -1.61%), and Valero Energy (VLO -1.44%). Here's why they still look like long-term buys.

A pair of senior citizens putting a coin into a piggy bank

Top dividend payers can help your retirement portfolio outperform. Image source: Getty Images.

A best-in-class yield

All of the integrated oil majors saw their share prices walloped during the recent Q4 2019 earnings season. Low oil, gas, and petrochemical prices combined with smaller refining margins left even these industry bigwigs facing lower revenues and poor earnings. And with oil and gas prices dropping even further in February, the industry may be in for a rocky ride in the short term.

But the drop in share prices caused dividend yields to go up, and Royal Dutch Shell's yield is now sitting at 7.1%, a two-year high. Although Shell's revenue and earnings were down on a year-over-year basis, the company still managed to churn out more than $10 billion of operating cash flow. Coupled with its $18 billion cash hoard, Shell should have no problems funding its best-in-class dividend. 

Meanwhile, over the long term, Shell is setting itself up for success through investments in its core oil and gas business, as well as a growing portfolio of renewable energy assets. For example, in the most recent quarter, the company acquired renewable energy retailers in Australia and the U.K., and is now providing 100% renewable electricity to more than 900,000 households. It also began deepwater oil and gas production at a new field offshore Brazil.

Shell's massive size and high yield make it an excellent and reliable choice for a retirement portfolio.

A dividend that keeps going up

It was only last year when another oil major, ExxonMobil, hit a milestone of sorts: Its dividend yield surpassed 5% for the first time this century. However, just a few short months later, ExxonMobil's yield now sits at 5.7%. That's not quite as high as Shell's, but Exxon has something that Shell doesn't.

ExxonMobil is a member of an elite group of stocks known as the Dividend Aristocrats. These top dividend growers have increased their dividends every year, year in and year out, for at least 25 years. ExxonMobil has been increasing its dividend for 36 straight years. By contrast, Shell's dividend hasn't gone up since 2014. 

The company should be able to continue those dividend increases through its increasing production levels. In the most recent quarter, ExxonMobil began producing oil at its promising Stabroek Block offshore Guyana, moving from discovery to production in less than five years, which is a quick turnaround in the oil and gas world. ExxonMobil has announced 14 other oil discoveries on the block, projecting production of more than 750,000 gross barrels of oil equivalent per day from the site within five years, representing an 18.7% increase over current production from this site alone.

The conservatively managed Exxon has a strong balance sheet, with a debt-to-equity ratio of just 0.25, one of the lowest among the oil majors. Its dividend looks set to keep increasing for decades to come.That should keep rewarding shareholders well into their golden years.

An eye on the future

Refiner Valero Energy isn't as dependent on the price of oil and gas as the oil majors, which produce the stuff. However, it's dependent on the "crack spread": the difference in price between the cost of a barrel of oil and the selling price of the refined products it can make from that barrel. In Q4, the crack spread was down, and Valero saw a small decline in revenue and adjusted earnings compared to Q4 2018. 

However, Valero is like Exxon in that it's consistently increased its dividend for the last 10 years. The company's recent price drop has pushed its yield up to 4.3%, which -- like Shell -- is the best yield in its class. 

Valero is also working to ensure its long-term viability through its investments in biodiesel. The company's joint biofuels venture with Darling Ingredients -- called Diamond Green Diesel -- is in the midst of a major expansion that should be complete by 2021. For now, Valero is still primarily a refiner of crude oil, but its biofuels business could be a major driver of growth for the company in the coming years and decades. 

Don't fear bargains

Some investors panic when stock prices drop. But savvy dividend investors know that's the best time to look for bargains. With the energy industry particularly volatile right now, many solid dividend payers are on sale, including Royal Dutch Shell, ExxonMobil, and Valero Energy. Over the long term, though, these should prove excellent investments as part of a diversified retirement portfolio.