Despite all the talk of rising interest rates and inflation, the market is on a tear this year, up 6%. Over the past 12-month period, the market is nearly up 10%. Some of the smartest dividend stocks on the market trade at decent levels right now.
Here’s a look at some of those smartest dividend stocks to buy now, even with just $400 to start.
You can’t go wrong with this stock
Most investors are familiar with Enbridge (TSX:ENB). The energy infrastructure behemoth operates a pipeline network that hauls massive amounts of crude and natural gas. Beyond that, Enbridge also boasts a strong renewable energy unit and natural gas utility.
Collectively, those segments make Enbridge a very defensive option to consider. They also generate a reliable and growing source of revenue for the company.
Perhaps most importantly, that stable revenue stream allows Enbridge to provide investors with one of the smartest dividend payouts on the market. As of the time of writing, Enbridge’s quarterly dividend provides an insane 7.52% yield.
For new investors starting out with just $400, that works out to just over 8 shares. That’s not enough to retire on, but it is enough to start building out a portfolio that can be enhanced with additional investments over time.
Even better, Enbridge has provided investors with annual upticks to its dividend for three decades without fail. That fact alone makes Enbridge a great buy-and-forget option. Throw in the reliable business and juicy yield, and you have one of the smartest dividend stocks on the market.
Oh, and let’s not forget that while the market trades up by double digits over the prior 12 months, Enbridge is down nearly 7% over that same period.
Growth & income: This stock offers both
It would be impossible to compile a list of some of the smartest dividend stocks without mentioning at least one of Canada’s big banks. The big bank that investors should look at right now is Canadian Imperial Bank of Commerce (TSX:CM).
CIBC isn’t the largest or most well-known of Canada’s big banks. It does however offer a mature domestic segment, some international exposure, and a juicy dividend.
The quarterly dividend on offer currently pays out a juicy 5.32% yield, making it an ideal option to consider for investors. Another key advantage is CIBC’s stock price. The bank trades at just over $65 per share, which translates into a lower cost of entry over its peers. For investors with $400 to start their portfolios, that works out to just shy of six shares.
Like Enbridge, an investment in CIBC should be seen as a long-term effort with additional investments over time. The bank has also provided investors with handsome annual increases without fail going back years.
Buy this stock today and forget about it for a decade. Or more.
One final stock to add to the list of the smartest dividend stocks to buy is Fortis (TSX:FTS). Fortis is one of the largest utilities in North America. Utilities operate one of, if not the most defensive business models anywhere.
In short, utilities are bound under contract to provide a service for which they are compensated for. Those contracts are regulated and often span several decades in duration. This means that utilities like Fortis earn a recurring revenue stream that allows them to invest in growth and pay out a handsome dividend.
In the case of Fortis, that dividend is paid out quarterly and currently works out to a tasty 4.42%, making it a solid option for any portfolio. Fortis is also one of just two stocks in Canada that is considered a Dividend King with 50 consecutive years of dividend increases.
That alone makes Fortis a buy-and-forget candidate. Throw in the recurring and stable revenue it generates, and you have one of the best, smartest dividend stocks on the market.
Final thoughts
Enbridge, CIBC, and Fortis all offer investors growth and income potential, making them some of the smartest dividend stocks to buy.
More importantly, they also provide some defensive appeal, which in my opinion, makes them great candidates for any well-diversified portfolio.
