The Smartest Dividend Stocks to Buy With $500 Right Now

Canada is a great place to invest in dividend stocks. You can collect dividend income from a wide mix of sectors and industries. The Canada Revenue Agency provides a dividend tax credit for dividend income, so dividends are more tax advantaged than in other countries (like the U.S.). That may be a major reason why Canadian dividend stocks are so prevalent.

If you have $500 and are looking to earn some dividend income, here are three stocks I’d consider buying today.

A dividend stock with midstream and utility assets

AltaGas (TSX:ALA) has delivered very strong returns for shareholders in recent years. This dividend stock is up 165% in the past five years. I will disclaim that I don’t think similar returns will occur in the future.

The company was trading at a distressed multiple in 2017. It sold off non-core assets and paid down debt. The stock soared as management completed a major turnaround. Today, it focuses on its regulated natural gas utility in the northeast U.S. and its midstream operations in Western Canada.

Its utility is expected to enjoy above-average growth over the coming years. It expects to grow its rate base by 7–9% per annum.

The midstream business has been winning some big contracts. Demand for propane and other natural gas derivatives is very high in Asia. AltaGas can sell these commodities for the highest prices in the world.

AltaGas trades with a 3.3% dividend yield. This stock has increased its dividend consecutively since 2020. It targets 5–7% annual dividend growth. A $500 investment in AltaGas today would earn $3.78 quarterly or $15.12 annually.

A TSX residential real estate stock in the U.S.

Another dividend stock worth taking a look at is BSR REIT (TSX:HOM.UN). While it is listed on the TSX, all of its residential properties are located in the United States (with most apartments in the U.S.).

BSR is attractive for several reasons. First, you get diversification outside of Canada. If you want to earn U.S. dollar dividends, you can. Secondly, its properties are in some of the top American cities for economic and population growth. This has supported historically strong rental rate growth.

Thirdly, BSR has a really solid balance sheet. It just sold off a substantial part of its portfolio at an attractive valuation. Yet, its stock price still trades at a considerable discount to its net asset value.

This stock also has an attractive dividend that it has been raising periodically. HOM.UN yields 4.3% right now. A $500 investment in BSR would earn $1.73 monthly or $20.79 annualized.

A pipeline stock with an attractive dividend

A final dividend stock I’d look to add is Pembina Pipeline (TSX:PPL). While it is somewhat similar to AltaGas, with substantial midstream operations, it also has a large pipeline business.

While its quarterly earnings can fluctuate, it tends to deliver steady results from year to year. Over 80% of its business is contracted. That side of the business widely supports its dividend.

Pembina generates a lot of excess cash. It has a self-funding model for its growing portfolio of assets. Pembina is one of only a few companies currently developing an LNG export terminal. It is already experiencing strong demand for that asset.

With a great development track record, a strong balance sheet, and a smart management team, this company should continue to deliver a growing stream of dividend income. Pembina yields 5.6% today. A $500 investment in Pembina stock would earn $6.39 quarterly or $25.56 annually.

Prices as of June 11, 2025