The Smartest Dividend Stocks to Buy With $400 Right Now

These dividend payers deliver income, over and above stock returns

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With all the volatility that investors have experienced in the market over the last year and a half, we are reminded why dividend stocks are some of the smartest investments you can buy for the long haul.

Dividend stocks are great because they are typically less risky than their non-dividend-paying peers. The reason is twofold.

First off, paying back some of their earnings to investors immediately helps lower the risk of the investment. With non-dividend-paying stocks, the idea is that these companies are investing all of their earnings into future growth. That growth isn’t guaranteed, though.

So by paying you a dividend and returning cash today, you already begin to earn a return on your investment, ultimately lowering the risk of loss of capital.

The other reason why they are typically less risky than non-dividend-paying stocks is that in order to pay a dividend, these companies need to earn a profit consistently.

And often, the best dividend stocks are ones with a significant track record of not only earning a profit but growing that profit year in and year out.

So with that in mind, if you’re looking for some of the best and smartest dividend stocks now, here are two to consider adding to your portfolio today.

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A top royalty stock that’s perfect for dividend investors to buy

If you’re looking for some of the best dividend stocks to buy now and boost your passive income, Pizza Pizza Royalty (TSX: PZA) is an intriguing business.

Pizza Pizza earns a royalty from all the sales done at Pizza Pizza and Pizza 73 locations across the country. Therefore, because there are hundreds of locations and Pizza Pizza doesn’t have to worry about the profitability of the individual restaurants, the revenue it earns from royalties typically doesn’t fluctuate much month to month.

Furthermore, Pizza Pizza only has minimal expenses. Therefore, the majority of its revenue flows through to the bottom line and because it doesn’t fluctuate often, Pizza Pizza is an ideal dividend stock to buy for your portfolio, especially with its 5.9% dividend yield.

Plus, in addition to its business model, Pizza Pizza is a well-known brand and low-cost option for consumers who want to eat out, but don’t necessarily want to spend an arm and a leg on a meal.

So the stock is also quite resilient, especially in comparison to its restaurant stock peers. Through the pandemic, the most recent headwind for Pizza Pizza and the entire restaurant sector, PZA only trimmed its dividend by 30%, and even that was being extra cautious and conservative.

For comparison, many of its peers suspended their dividends altogether, so the fact that Pizza Pizza only trimmed it slightly and only for a few months shows how resilient it can be.

Therefore, if you’re looking for some of the best dividend stocks to buy now, Pizza Pizza is one you’ll certainly want to consider.

A top Canadian gold stock offering a 5.1% yield

In addition to Pizza Pizza, another one of the best and smartest dividend stocks to buy now is B2Gold (TSX: BTO).

Gold prices have been under pressure over the last year and a half as rising interest rates have hurt the value of assets like gold. Therefore, gold stocks like B2Gold are understandably trading quite cheap in the current environment.

However, with inflation cooling down now, and interest rates looking like they are peaking, gold prices and gold stocks like B2Gold could soon begin to gain some momentum and rally again.

Therefore, given the fact that B2Gold is so cheap, plus the fact it’s one of the best run gold miners with some of the lowest costs of operations, it seems like one of the smartest stocks you can buy now.

Plus, because of its low-cost operations, B2Gold is constantly earning attractive cash flow, allowing it to pay a substantial dividend, especially for a gold stock.

And after B2Gold’s sell-off the last few months, that dividend yield has risen to more than 5.1% today. Therefore, while the stock is cheap and offers a significant yield, and with the gold sector looking like it could be on the verge of a recovery, it seems like B2Gold is one of the smartest dividend stocks to buy now.

Fool contributor Daniel Da Costa has positions in B2Gold. The Motley Fool recommends B2Gold. The Motley Fool has a disclosure policy.

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