The stock market can't seem to make up its mind lately: Is it going up or going down? Should investors relax or panic? There's another big drop coming...or is there?

If you need to find a bit of calm amid the storm, you might want to consider buying and holding top dividend stocks. We asked five of our Motley Fool contributors for their best picks to buy and hold through the market turmoil. They came back with NextEra Energy Partners (NEP -0.64%), American Tower (AMT 0.43%), Brookfield Infrastructure (BIP 0.78%) (BIPC 1.86%), Steel Dynamics (STLD -1.53%), and Stag Industrial (STAG -0.20%). Here's why.

A man ducks beneath a chalk drawing of a large arrow breaking.

Image source: Getty Images.

An energy dividend built for the future

Travis Hoium (NextEra Energy Partners): One of the best ways to make money in renewable energy stocks today is to own companies that own energy-producing assets. These are often known as yieldcos, which is exactly what NextEra Energy Partners is. It owns assets that sell electricity to utilities and uses the cash flow to pay dividends to investors.

Today, NextEra Energy owns 5,330 megawatts (MW) of renewable energy assets that have an average remaining contract life to sell electricity to utilities of 15 years. It also has a structure that allows it to not pay U.S. federal taxes for about the next 15 years, including more than eight years of tax-free dividends. When you consider that the dividend is 4.3%, that's a good deal for investors.

What's unique about NextEra Energy Partners is that it's controlled by NextEra Energy, which has an incentive to continually drop down projects and keep the dividend growing. Management says that it has visibility to 12% to 15% dividend growth through at least 2024.

No matter what happens in the economy or the market, people will use energy. And NextEra Energy Partners has big contracts to sell energy to utilities, which will keep this dividend flowing for a very long time.

This business is as durable as it gets

Tyler Crowe (American Tower): I think you would be hard-pressed to find a business that is as insulated or protected from the ups and downs of the economy as cell tower REIT American Tower. The company rents out space on cell phone towers to telecommunication companies that need to deploy antennas and other kinds of broadcast equipment to support their data and cellular networks. This is an incredibly lucrative business because:

  1. Its customers sign long-term contracts with built-in price escalators such that rent keeps up with inflation.
  2. Its customers are massive telecom companies, so the chances of a customer not paying rent are marginal at best.

That kind of revenue stability is inherent in this business and doesn't really separate American Tower from others, though. What puts American Tower above the rest is management's ability to grow the business by expanding in high-growth markets with little competition overseas. Over the past decade, American Tower has grown its international presence such that it is larger than its U.S. footprint and has made the slow-but-steady business of renting out tower space into a growth machine.

AMT Net Income (TTM) Chart

AMT Net Income (TTM) data by YCharts.

Keep in mind, though, that shares of American Tower rarely go on sale. Its stock currently trades at 31 times its annualized funds from operations (FFO), which is a better measure than earnings for real estate companies. It's expensive, but it is expensive for a reason. If you are looking for a place to park your money during a market crash, take a hard look at American Tower.

A long-term wealth creator

Matt DiLallo (Brookfield Infrastructure): Brookfield Infrastructure has an excellent track record of creating value for investors. While its stock price isn't immune to market turmoil, its business model has proven its long-term durability. That's evident in its track record of growth. The company has increased its earnings and dividend at double-digit compound annual rates since its formation more than a decade ago, powering total annualized returns in the mid-teens over the last decade.

Several factors have played a role in Brookfield's resiliency. For starters, it generates very stable cash flow, because long-term contracts or government regulators lock in 95% of the rates on its energy, data, transportation, and utility infrastructure assets. On top of that, Brookfield has a strong investment-grade balance sheet with lots of liquidity, which gives it the financial flexibility to continue investing during tough times. The company also has a reasonably conservative dividend payout ratio of around 65% of its cash flow, which enhances the sustainability of its 4.6%-yielding dividend and provides additional funds to reinvest on expansion projects.

Thanks to that solid financial profile and the embedded organic growth within Brookfield's portfolio, the company anticipates that it can grow its dividend by 5% to 9% per year. Given the rock-solid backing of that outlook, Brookfield Infrastructure is a great dividend stock to buy when the stock market hits some turbulence, since that usually allows investors to lock in a higher yield.

Don't ignore this steelmaker

Jason Hall (Steel Dynamics): The steel industry can be a tough place to invest. Steel demand is notoriously cyclical, and big profits can quickly swing to losses during recessions. The primary reason is that steel facilities have very high fixed costs, and if demand falls quickly, steelmakers often can't bring expenses down quickly enough to avoid getting burned. It happens every steel cycle.

Steel Dynamics, however, has a big competitive advantage over most other steelmakers. The company, which was founded less than 30 years ago, makes steel with electric arc furnaces, as opposed to blast furnaces. Blast furnaces have the advantage in periods of high demand, since they can produce larger quantities of steel at lower costs when they are operating at higher capacities.

But when steel demand is lower or falling, Steel Dynamics' model pays off. Electric arc furnaces are far more flexible, and Steel Dynamics can bring its costs down far more quickly. As a result, the company is able to operate more profitably across every part of the steel market cycle. Compare that to U.S. Steel (X 1.55%) over the past 20 years:

STLD Free Cash Flow Chart

STLD Free Cash Flow data by YCharts.

Steel Dynamics has a strong record of turning steel into profits and returning some of those profits to shareholders in dividends. At recent prices (and after a 4% increase in May), the dividend yield of 3.4% is well above the historical average:

STLD Dividend Chart

STLD Dividend data by YCharts.

Lastly, steel is the bones of the world's infrastructure. Decades of global middle-class growth will require trillions in new infrastructure and modernization of existing infrastructure. Steel Dynamics should prove a big winner from that trend.

A contrarian pick

John Bromels (Stag Industrial): I'm not gonna lie: While Stag is a REIT like American Tower, and while it boasts a higher dividend yield (4.9%) right now than any of my colleagues' picks, it has less of a tried-and-true track record. Higher payouts often come with increased risk, and that's true here as well. But I still think Stag Industrial is worth considering.

As its name suggests, Stag invests in industrial properties like manufacturing plants, warehouses, and distribution centers. Manufacturing activity is recovering after taking a hit from the coronavirus pandemic, but as consumers have turned to e-commerce to meet their shopping needs, the company's warehouses and distribution centers have been busy. This growth in e-commerce is likely to continue, which puts Stag in an excellent position to benefit.

Stag's 91.8 million square feet of industrial space is spread across 38 states, mostly in mid-sized urban markets. The company has increased its dividend every year since its inception in 2011 and pays it in monthly installments instead of the usual quarterly installments, which is a nice plus. Stag is an income investor's bet on the growth of e-commerce, and it looks like one that should pay off.