The 2 Smartest Dividend Stocks to Buy With $1,000 Right Now

You can expect strong returns from these two Canadian dividend stocks without exposing yourself to excessive risk.

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Do you want to invest in the stock market but are concerned about losing your hard-earned money? If so, you’re not alone, as many beginning investors are hesitant to take risks in a volatile and uncertain market.

After posting a fresh record high in May 2024, the TSX Composite benchmark has seen a sharp decline since then as investors remain worried about the near-term global economic outlook. However, there are still some opportunities to make money in the long run by investing in Canadian dividend stocks. This way, you can invest in high-quality companies that reward their shareholders with regular dividends without taking excessive risk.

If you have $1,000 to invest right now, you may want to consider buying these two top Canadian dividend stocks that not only offer attractive yields but also have strong growth potential for the future, which could help their share prices rise over time.

Brookfield Renewable stock

Brookfield Renewable Partners (TSX:BEP.UN) has a high-quality global portfolio of renewable energy assets, including hydropower, wind, solar, and storage facilities. As part of Brookfield Asset Management, the company focuses on sustainable energy projects to meet growing clean energy demands.

It currently has a market cap of $10 billion as its TSX-listed stock trades at $35.05 per share after rising by 12% for the last three months. The stock has a 5.5% annual dividend yield at the current market price and distributes these payouts quarterly.

In the first quarter, Brookfield Renewable reported an 8% YoY (year-over-year) rise in its FFO (funds from operations) to US$296 million, highlighting strong operational performance. Despite strong FFO and a solid 12.1% YoY increase in its revenues, the company posted an adjusted quarterly net loss of US$0.23 per share as it currently remains focused on expanding its renewable energy portfolio.

Brookfield Renewable recently partnered with American tech giant Microsoft to deliver over 10.5 gigawatts of renewable energy capacity. At the same time, the company is on track to introduce approximately 7,000 megawatts of new renewable capacity this year. Such partnerships and expansion projects could boost its cash flows and profits in the long term, making Brookfield Renewable a smart dividend stock to buy now.

IGM Financial stock

IGM Financial (TSX:IGM) could also be one of the smartest dividend stocks to buy on the Toronto Stock Exchange right now. The Winnipeg-based company focuses on providing investment and wealth management services to its subsidiaries, including IG Wealth Management and Mackenzie Investments.

It currently has a market cap of $9.1 billion as its stock trades at $38.34 per share with nearly 10% year-to-date gains. At this market price, IGM stock offers an annualized dividend yield of 5.9%.

Notably, IGM had $251.1 billion worth of assets under management and advisement at the end of May, reflecting a 1.8% increase over the previous month. In the first quarter, the Canadian financial services firm’s adjusted earnings rose 10.6% YoY to $0.94 per share, beating Street analysts’ expectations of $0.88 per share.

Analysts expect its earnings growth trend to improve further in the second half of 2024 as it remains focused on trimming unnecessary expenses, which could also help it boost long-term profitability. These factors make IGM a really attractive dividend stock to buy now.

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.

The Motley Fool recommends Brookfield Asset Management, Brookfield Renewable Partners, and Microsoft. The Motley Fool has a disclosure policy. Fool contributor Jitendra Parashar has no position in any of the stocks mentioned.

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