Is your portfolio diversified? Investing in some of the smartest dividend stocks on the market is a great way to establish a stable and recurring income stream. Fortunately, there are plenty of options to consider, even in a volatile market.
Keep in mind that you don’t need a lot of cash to start with. Here’s a look at several of the smartest dividend stocks for your portfolio that you can buy with just $400 right now.
$400 is all it takes for this defensive gem
One of the first things that come to mind when looking for some of the smartest dividend stocks to buy is the defensive appeal of a stock. And that’s just one reason why Fortis (TSX:FTS) is the first dividend stock to consider.
Fortis is one of the best-known and largest utilities on the continent. Utilities are reliable long-term investments, and that’s thanks to the stable business models they adhere to. In short, the utility is bound by long-term regulatory contracts to provide a service. In exchange for that service, the utility receives a recurring revenue stream that is incredibly stable.
Additionally, those regulatory contracts can span decades in duration, meaning that Fortis is truly one stock you can buy and forget for a decade or more.
In terms of income, Fortis offers a yield of 4.11%. If that’s not enough, prospective investors should note that Fortis has an established history of providing generous annual ticks to that dividend that stems back a whopping 49 consecutive years.
A $400 initial investment in Fortis is enough to buy just over 7 shares of the stock at its current stock price (as of the time of writing). That’s not enough to retire on, but it is enough to start investing in one of the smartest dividend stocks on the market.
Do you want a juicy yield?
Utilities like Fortis are some of the best long-term defensive picks on the market. But utilities aren’t the only viable investment options to consider. Canada’s telecoms are well-known for boasting a similarly defensive income stream with a juicy yield.
Specifically, I’m referring to BCE (TSX:BCE). BCE is one of the largest telecoms in Canada. Also worth noting is that BCE isn’t a pure-play telecom. The company also operates a massive media segment that includes dozens of radio and TV stations.
BCE also has an interest in professional sports teams, making it a well-diversified pick for investors.
The already defensive appeal of telecoms has grown considerably in recent years. With more people continuing to work and study in a remote setting, the need for consistent and high-speed internet has become one of necessity.
Additionally, the ongoing rollout of 5G, coupled with the increased adoption of mobile commerce, has elevated the need for high-speed data connections. In fact, most people may not even realize just how many devices our smartphones have replaced in the past decade.
Incredibly, that appeal continues to grow, and the necessary bandwidth that BCE provides makes it a stellar long-term investment with its massive defensive appeal.
Turning to income, BCE has been paying out dividends without fail for over a century. The current yield on offer works out to 5.81%, which is higher than its big-telecom peers. Given a $400 investment, new investors can scoop up a little over six shares of BCE.
Again, that’s a great starting point for any long-term portfolio.
The smartest dividend stocks you can buy are here
No stock is without risk, and that includes both the incredibly defensive BCE and Fortis mentioned above. What the duo noted above does offer investors, however, is steady growth, stable income, and long-term potential.
A $400 investment in both, coupled with additional investments over time, is a great way to build out part of a larger, well-diversified portfolio.