2 Dividend Stocks That Could Turn $100 Into $17,178

If you only have $100 to spend on investing, these two dividend stocks are the best place to put that cash and see it grow over decades.

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Many investors hold back because they believe they don’t have enough cash to invest. That simply is not true. What these investors should do instead is just be very picky about the type of stocks you invest in. A great place to start is with dividend stocks. With just $100, you can create a stash of wealth that you can use to either reinvest, invest elsewhere, or put toward your investment goals.

If this strategy sounds good to you, consider buy companies like Suncor Energy (TSX:SU)(NYSE:SU) and Algonquin Power & Utilities (TSX:AQN)(NYSE:AQN) to get started.

Energize your dividend stocks

The reason I like Suncor stock and Algonquin stock are for the same reason: energy. On the one hand, Suncor stock is within the oil and gas sector. This sector is currently in rebound mode, with Suncor stock likely to see a massive boost in share price during the next year as oil and gas prices continue to rise.

The company made several investments before the crash that should help Canada’s largest fully-integrated oil and gas company thrive. One such investment was in the Alberta oil sands, with the potential for a huge increase in oil and gas production. As the demand for oil continues with the pandemic eventually behind us, Suncor stock is likely to climb in share price. Meanwhile, it has long-term contracts to support growth in for decades to come, which makes it one of the top dividend stocks to check out.

Algonquin stock, however, is a utility and renewable energy stock. So you have two benefits here. The company has proven its growth strategy through acquisition works. It simply buys up companies, increases revenue, then buys more companies. Utilities will always be needed, so this company and its long-term contracts will also support growth for years.

But Algonquin stock has also invested in renewable energy, and renewable is the future. While it won’t be immediate, decades from now renewable energy will eventually take over oil and gas. So investing in a company that has that future in mind is a strong recommendation, epecially when considering them amongst other dividend stocks.

Dividends galore

Now on the one hand, Suncor stock cut its dividend quite literally in half because of the March 2020 crash. While that might not be great news for today’s investors seeking quick cash, it’s great news if you’re thinking long term. You can lock in a cheap share price and look forward to a huge bump in passive income when dividend stocks like Suncor stock likely return to normal. But you can still lock in a dividend yield of 2.97% that’s grown at a compound annual growth rate (CAGR) of 10.6% in the last decade.

Meanwhile, Algonquin stock barely saw a blip in revenue thanks to its stable utility business. So investors can feel secure that this stock will continue to deliver dividend payouts and increases. Today you can lock in a dividend yield of 4.44% that’s risen at a CAGR of 12.4% during the last decade.

So let’s say you only had $100 to invest and put about $50 towards each stock. That could secure you $4.20 in dividends each year. I get it, not a lot. But these are long-term holds. Let’s say you reinvested those dividends each year for the next 30 years. You’ve then turned that $100 into $17,178.29 without investing another penny of your own money at today’s levels! So never say that $100 isn’t enough for dividend stocks.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. 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, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned.

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