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

You can buy these two smart Canadian dividend stocks now and hold them for the long term to expect strong returns on your investments.

| More on:
Printing canadian dollar bills on a print machine

Source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Investing in the Canadian stock market doesn’t necessarily require you to be a millionaire or have a lot of financial expertise. In fact, you can start with a small amount of money and grow your wealth over time by investing in companies that pay regular dividends to their shareholders. In simple terms, dividends are payments that some companies make to their shareholders out of their profits. As most dividend-paying companies have strong financial positions, they can reward their loyal investors with consistent and growing dividends.

If you have $1,000 to invest right now, here are two of the smartest Canadian dividend stocks to buy that offer growing dividends and solid growth potential.

Canadian Imperial Bank stock

With a market cap of $66.9 billion, Canadian Imperial Bank of Commerce (TSX:CM) is currently the fourth-largest bank in the country. After witnessing a spectacular rally of around 46% over the last nine months, CM stock currently trades at $71 per share.

At this market price, it has a decent 5.1% annualized dividend yield. The bank distributes its dividend payouts every quarter and is known for its strong dividend payout history. In the 10 years between its fiscal year 2013 and 2023 (ended in October 2023), Canadian Imperial Bank’s dividend per share rose around 81%.

Created with Highcharts 11.4.3Canadian Imperial Bank Of Commerce PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

In the quarter ended April 2024, Canadian Imperial Bank’s total revenue rose 8.1% YoY (year over year) to $6.2 billion due mainly to the strong performance of its capital markets and Canadian personal and business banking segments. Even though its quarterly provisions for credit losses rose by $76 million from a year ago, its adjusted earnings grew positively by 2.9% YoY to $1.75 per share, exceeding Street analyst expectations.

As gradually declining interest rates in Canada could potentially increase lending and improve the overall financial market conditions, Canadian Imperial Bank is likely to benefit, which should drive its share prices higher. Considering that, it could be one of the smartest dividend stocks to buy now in Canada and hold for the long term.

BCE stock

Another top dividend stock that has caught my attention of late is BCE (TSX:BCE). In addition to being among Canada’s largest telecommunication companies, it’s also renowned for its strong dividend track record and the stability it offers as a utility-like company in the telecom sector. Interestingly, BCE has raised its dividends for 16 years in a row. Its dividend per share inched up by around 71% in the 10 years ended in 2023.

BCE has a market cap of $42.4 billion, and its stock trades at $46.48 per share, with nearly 11% year-to-date losses. At the current market price, it offers an impressive 8.7% annualized dividend yield.

While BCE is likely to announce its second-quarter earnings in the first week of August, its first-quarter financial results were largely optimistic. In the quarter ended in March 2024, the Canadian telecom giant’s wireless and residential internet revenue grew by 3% YoY. More importantly, its digital revenue growth stood strong at 33% YoY, which could continue in the coming quarters, driven by its digital initiatives and investments.

Besides BCE’s strong financial position, its continued investment in upgrading its wireless and wireline networks also boosts its long-term growth prospects, making it a top Canadian dividend stock to consider right now.

Should you invest $1,000 in Allied Properties Real Estate Investment Trust right now?

Before you buy stock in Allied Properties Real Estate Investment Trust, consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Allied Properties Real Estate Investment Trust wasn’t one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $20,697.16!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 29 percentage points since 2013*.

See the Top Stocks * Returns as of 3/20/25

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 has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Fool contributor Jitendra Parashar has no position in any of the stocks mentioned.

Confidently Navigate Market Volatility: Claim Your Free Report!

Feeling uneasy about the ups and downs of the stock market lately? You’re not alone. At The Motley Fool Canada, we get it — and we’re here to help. We’ve crafted an essential guide designed to help you through these uncertain times: "5-Step Checklist: How to Prepare Your Portfolio for Volatility."

Don't miss out on this opportunity for peace of mind. Just click below to learn how to receive your complimentary report today!

Get Our Free Report Today

More on Dividend Stocks

A close up color image of a small green plant sprouting out of a pile of Canadian dollar coins "loonies."
Dividend Stocks

I’d Put $15,000 in These 3 Dividend-Growth Champions for Increasing Income Potential

Want to offset some volatility? Here are three defensive dividend-growth champions that can generate a juicy yield right now.

Read more »

Blocks conceptualizing Canada's Tax Free Savings Account
Dividend Stocks

Transform Your TFSA Into a Cash-Creating Machine With $7,000

Discover how the Tax-Free Savings Account can be your golden goose for generating cash without losing your investment.

Read more »

monthly desk calendar
Dividend Stocks

How I’d Invest $10,000 in Canadian Value Stocks for Monthly Dividend Income

A $10,000-diversified portfolio of value stocks focusing on dividend safety, yield, growth, and payment schedules can provide a reliable source…

Read more »

a person watches a downward arrow crash through the floor
Dividend Stocks

Is This Correction Your Chance? Top 4 Canadian Dividend Stocks on Sale

Stocks may be down, but now is your chance to get some of these top dividend stocks on sale.

Read more »

Confused person shrugging
Dividend Stocks

Where to Invest $2,500 in the TSX Today

These TSX stocks offer attractive dividends and a shot at decent upside on a rebound.

Read more »

Pile of Canadian dollar bills in various denominations
Dividend Stocks

Invest $25,000 in These Dividend Stocks for $1,956.66 in Annual Passive Income

Dividends stocks can make a huge difference, even if shares don't move an inch. And these might be the best.

Read more »

Pile of Canadian dollar bills in various denominations
Dividend Stocks

Got $5,000? 5 Income Stocks to Buy and Hold Forever

These income stocks have a solid dividend-payout history that can help you earn stress-free passive income.

Read more »

grow money, wealth build
Dividend Stocks

Why I’d Invest $10,000 in This Undervalued Dividend-Growth Stock for Decades of Income

This undervalued dividend stock offers a high yield of over 8% and can help you earn more than $200 in…

Read more »