The Smartest Dividend Stocks to Buy With $400 Right Now

The market is full of dividend stocks to buy. Here’s a look at two options that cater to both growth and income-earning goals alike.

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There are plenty of great dividend stocks to buy, but not all of those stocks can provide a juicy income for new investors. This is especially true for those who are new to investing or don’t have a lot of funds to invest with (yet).

Fortunately, there are some dividend stocks to buy that are suited for those with fewer funds to start – even if you just have $400 to start!

Here’s a look at two great dividend stocks to buy that are really hard to ignore right now.

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First, let’s talk about Enbridge

Enbridge (TSX: ENB) is hands-down one of the best stocks to invest in right now and there’s a few reasons for that view. That list includes the company’s diversified revenue stream, its increasingly defensive moat and, most importantly, the insane (and still growing) dividend it offers.

In terms of diversification, most investors are aware of Enbridge’s lucrative pipeline business. That segment hauls massive amounts of crude and natural gas each day to storage tanks and refineries across North America.

In fact, Enbridge hauls so much crude and natural gas that the segment has become one of the most impressive defensive moats on the market. For those curious on the amount transported, Enbridge hauls one-third of all North American-produced crude and one-fifth of the natural gas needs of the U.S.

Apart from that lucrative pipeline business, Enbridge operates a renewable energy segment and the largest natural gas utility on the continent.

Collectively, those segments provide a stable and recurring source of revenue that helps the company to pay out one of the best dividends on the market. That dividend currently works out to 6.3%.

Enbridge has also provided investors with annual upticks to that dividend for an incredible 30 consecutive years without fail.

For investors looking at dividend stocks to buy with $400, they will be able to purchase a handful of shares that can form the core of a longer-term portfolio. Investors can also reinvest those dividends, allowing that nestegg to grow on its own.

Put your money in a (big) bank

Canada’s big banks are almost always known as being some of the best investments on the market. That’s thanks to the stable defensive domestic market that provides ample revenue, coupled with international expansion that provides an avenue for growth.

Factor in a juicy dividend with a history of annual or better upticks, and you have the perfect buy-and-forget investment for any portfolio.

Investors looking for dividend stocks to buy with $400 should look closely at Canadian Imperial Bank of Commerce (TSX: CM). CIBC is one of the smaller big banks, but still packs a massive punch.

Unlike its larger peers, CIBC has a smaller international footprint, which means the bank is more focused on the domestic mortgage market.

That being said, CIBC has expanded into the U.S. over the past decade, amassing a network of branches and offices across private, commercial, and private wealth offices

Turning to dividends, CIBC boasts a tasty quarterly dividend that pays out a yield of 4.1%. Investors seeking dividend stocks to buy such as CIBC should note that like Enbridge, CIBC has an established cadence of providing annual or better upticks to that dividend.

This makes the bank a superb pick for new investors to buy now and hold for long-term growth.

Diversify your dividend stocks

All investments, no matter how defensive they appear to be, carry risk. That’s why it’s important to diversify your portfolio with stocks from across the market.

In the case of both CIBC and Enbridge, both stocks offer growth and income-earning potential that make them solid options to consider for any portfolio.

Buy them, hold them, and watch them grow over time.

Fool contributor Demetris Afxentiou has positions in Enbridge. The Motley Fool recommends Enbridge. The Motley Fool has a disclosure policy.

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