When it comes to investing and putting your hard-earned money to work, it’s always essential to do a lot of research. But in the current environment, with so much uncertainty and growing concerns about a trade war, it’s even more important to make sure the dividend stocks you buy right now are some of the smartest investments you can make.
When researching stocks, it’s crucial to understand how a company makes money, who its customers are, how strong its balance sheet is, and how much growth potential it has, among other key factors.
But one of the biggest things to consider today is how the company might be impacted either directly by tariffs or indirectly by a weakening economy if a trade war drags on and starts to slow down economic growth.
So, with that in mind, if you’re looking for top dividend stocks to buy now, here are two of the best to consider today.
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A high-potential real estate stock that’s trading undervalued
When it comes to finding smart dividend stocks to buy now, high-quality residential REITs are at the top of the list, especially if you can buy them while they’re undervalued.
That’s why one of the best dividend stocks to buy now is InterRent REIT (TSX: IIP.UN).
InterRent is a reliable REIT that owns residential properties in Canada and has a strong history of rapid growth. However, with higher interest rates negatively impacting its profitability over the past few years, the stock is trading cheaply today, offering investors an excellent buying opportunity.
And with the stock trading undervalued, it currently offers a yield of just over 3.5% today, which is significantly higher than its five-year average of 2.7%. However, it also trades at a forward price-to-funds-from-operations ratio of just 17.4 times, well below its five-year average of 23.9 times.
Furthermore, analysts estimate that its funds from operations per share will jump by roughly 6.3% this year as interest rates continue to decline and InterRent’s economics improve.
In addition, the stock could also continue to see a boost after the activist hedge fund Anson Funds Management built a 9% stake in the REIT earlier this month.
So if you’re looking for smart dividend stocks to buy now, an undervalued and high-quality residential REIT like InterRent is certainly one of the best to consider.
One of the smartest dividend stocks to buy now and hold for years
In addition to a high-quality REIT like InterRent, low-risk utility stocks like Emera (TSX: EMA) are also some of the best dividend stocks to buy now.
As a well-diversified utility, Emera is one of the lowest risk stocks you can buy on the TSX.
With the stock providing essential services to millions of customers across North America, and with its operations regulated by the government, Emera offers steady and stable growth as well as an attractive dividend yield to long-term investors.
Furthermore, it has a tonne of potential to continue rallying in the near term as interest rates continue to fall.
Plus, Emera isn’t just one of the best dividend stocks to buy in the current, highly uncertain economic environment. It also has a tonne of long-term potential as well.
As energy demand continues to rise, especially with the growing needs of data centres and artificial intelligence technologies, utilities like Emera that provide electricity transmission have a significant runway for growth.
That’s why Emera not only has strong growth potential over the coming years, but its dividend should also keep increasing as its earnings and free cash flow continue to expand.
The stock has already increased its dividend for an impressive 18 consecutive years, and it currently offers a yield of more than 4.9% at its current price, showing what a high-quality investment it is.
So, if you’re looking for smart dividend stocks to buy now, there’s no question that Emera is at the top of the list.
