As an asset classdividend stocks typically outperform their non-dividend counterparts. And with dividend reinvestment plans, or DRIPs, the opportunity for compound returns only adds to their appeal. (See also: Introduction to Dividends: Investing in Dividend Stocks.)

True, dividend stocks are subject to price pressure when interest rates rise, but when prices are depressed, there is an opportunity to chase extra yield – a definite plus for long-term investors. (See also: Yellen Sees More Rate Hikes With Economic Growth.)

A high-quality dividend stock never goes out of favor with sage investors building a balanced portfolio. And in times of market turbulence, dividend-paying stocks are a hedge against volatility.

In 2017, stocks have been gaining and positive sector expectations have come to fruition. Many dividend stocks have been outperforming with several industries posting handsome gains under the policy preferences of the new presidential administration. With a continued bullish outlook for stocks into 2018, investors who choose equity allocations on a price and income basis could generate considerably higher total returns. (See also: 6 Rules for Successful Dividend Investing.)

The three large-cap stocks below have been meeting target expectations in 2017 with strong dividends and returns compared to their sector peers. They stand to gain further as equity momentum and policy trends continue to take hold. All figures are as of November 3, 2017.

Wells Fargo & Company (WFC)

Rising rates and deregulation are factors helping bank stocks. Interest income is expected to help top line revenue growth. Meanwhile, the Trump administration has also expressed its plans for removing burdensome regulatory requirements. Dodd-Frank and its onerous stress tests are on the chopping block, which should drive growth in the financial sector. Wells Fargo is already a top performer in the dividend department – its current dividend yield is approaching 3%. And the fact that the company suffered a blow to its reputation over phony accounts is actually a boon to investors, as it is still a blue-chip stock with a solid business. (See also: Wells Fargo Mea Culpa Could Send Stock Flying.)

Like most bank stocks, Wells Fargo has done well over the past year. During that time frame, its stock price is up 27.68% to $56.35 as of November 3. Perhaps even better for dividend investors, Wells Fargo has a payout ratio of nearly 40%, placing it near the top for major bank stocks. By comparison, Bank of America Corporation (BAC) pays a paltry 19.71%. (See also: Wells Fargo Stock: A Dividend Analysis.)

Johnson & Johnson (JNJ)

Johnson & Johnson is the largest health care company in the world, boasting a market cap of $376.7 billion. It is a leader in the pharmaceutical space, especially in the costly oncology and specialty drugs that are driving growth in the sector. (See also: Top Stocks to Watch in 2017.)

The company also stands to gain from the tax proposals favored by the Trump administration, particularly those aimed at repatriating overseas profits. If Johnson & Johnson is able to access its overseas cash and cash flows for domestic use, the money could be used to create tremendous value for shareholders.

Johnson & Johnson is no slouch in the dividend department either, with a strong track record and current dividend yield approaching 3%. As of November 3, shares of Johnson & Johnson were trading at $140.08, up 24.63% over a 52-week period. (See also: J&J Buying Actelion for $30 Billion Cash.)

Chevron Corporation (CVX)

One could argue that the oil recession makes Chevron an odd choice for a dividend stock, but with dividend yields above 3.5%, it's a solid selection. Chevron is a diversified energy company that only stands to gain in a policy environment that favors fossil fuels, and its downstream businesses are a natural hedge against any temporary weakness in the oil and gas market.

Chevron has a market cap of $218 billion. The company's shares were trading at $114.99 as of November 3, an increase of 13.21% over the past year, with dividends of $4.32 per share. For the trailing twelve months it is also outperforming the S&P 500 energy sector which has a return of 1.34%. (See also: Oil Investors Await 2017 Investment Plans.)

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