Did you know that you can buy some of the smartest dividend stocks on the market with just $500? You won’t be able to retire from those investments just yet, but picking the right stocks today will provide you with an ample nest egg in the future.
Here’s a rundown of what those smartest dividend stocks to buy now are and why they belong in your portfolio.
This stock has a wow factor you can’t ignore
Let’s start with Enbridge (TSX:ENB). The energy infrastructure behemoth operates the largest and most complex pipeline network on the planet. It’s also responsible for hauling one-third of all North American-produced crude and one-fifth of the natural gas needs of the U.S. market.
In other words, Enbridge generates a reliable revenue stream that boasts one of the best defensive moats on the market.
If that’s not enough, Enbridge also boasts a growing renewable energy portfolio and operates the largest natural gas utility in North America.
Perhaps best of all, Enbridge pays out a juicy quarterly dividend that carries a yield of 6%. The company has also provided annual upticks to that dividend for 30 consecutive years without fail. That fact alone makes Enbridge one of the smartest dividend stocks on the market.
A $500 investment in Enbridge today will provide a good start to any long-term portfolio thanks to reinvested dividends.
Another great option is this big bank stock
Canada’s big banks are stellar long-term investments that boast growing dividends, solid results, and plenty of growth potential. One big bank stock to consider buying right now is TD Bank (TSX:TD).
TD is the second-largest of Canada’s big banks. The bank also enjoys a very strong presence in the U.S. market, where its impressive network stretches across the East Coast from Maine to Florida.
TD’s stock price has taken a dip over the past year, reflected in a 10% dip over the trailing 12-month period. That dip is attributed to TD’s issues in the U.S. market, where U.S. regulators found that the bank didn’t do enough to prevent money laundering.
As a result, TD was hit with an asset cap in the U.S. and a hefty $3 billion fine.
But then why is TD considered one of the smartest dividend stocks to buy? That’s because, despite those short-term issues, TD is a great long-term option to consider. If anything, the current slump makes it a great time to buy the stock at a 10% discount.
Adding to that appeal is the fact that TD offers investors a healthy quarterly dividend, which it has been paying out for over a century without fail.
As of the time of writing, TD’s dividend works out to a juicy 5.1%. While a $500 investment won’t let you retire, it is enough to start earning some fractional shares over time through reinvestments.
Buy the smartest dividend stocks today
No stock, even the most defensive is not without some risk. In the case of both TD and Enbridge, both companies offer impressive defensive moats in addition to a healthy (and growing) dividend.
In my opinion, one or both should be core holdings in any well-diversified portfolio.
Buy them, hold them, and watch them grow.
