The Smartest Dividend Stocks to Buy With $100 Right Now

Even a small amount of money can have a significant impact, particularly when you invest in stocks that generate income returns.

I’m talking about dividend stocks, naturally. There are many excellent stocks that offer attractive dividends at a reasonable price. Here are my top picks for the smartest dividend stocks to invest in with $100 right now.

to buy right now.

1. Ares Capital

At its current price, I think investing in this item for around $23 is one of the smartest investment choices available, particularly for those seeking a steady income stream.

To qualify for exemption from federal income taxes, BDCs must distribute at least 90% of their profits to shareholders as dividends. And this particular BDC generates a significant amount of profits for its shareholders.

A major factor behind this is the type of business involved. The demand for direct lending from BDCs is increasing due to factors such as the speed of deal closings and reliable access to capital during times of market volatility. The total potential market for direct lending is approximately $3 trillion for traditional middle-market companies in the US with annual revenue between $100 million and $1 billion. This figure increases to $5.4 trillion if companies with annual revenue exceeding $1 billion are included.

Additionally, Ares Capital stands out significantly from its peers. It is the largest publicly traded Business Development Company and has established strong connections within the industry. Furthermore, it has achieved greater dividend-per-share growth and overall returns over the past 10 years compared to its top competitors.

2. Enterprise Products Partners

Investing in limited partnerships (LPs) has some tax complications, but I believe Enterprise Products Partners is worth the extra effort.

Enterprise’s forward distribution yield recently reached over 6.35%. The cooperative has continued to increase its dividend payout for an impressive 26 years running.

I appreciate that Enterprise Products Partners’ business remains stable during recessions and downturns. Inflation has a relatively small effect on it because about 90% of its long-term contracts include clauses that automatically increase payments as prices rise. Additionally, Enterprise’s cash flow doesn’t swing with changes in oil and gas prices; it charges the same rate for using its pipelines, regardless of commodity prices.

That’s not the only reason why investing in Enterprise is a wise decision. Its valuation is desirable, with a forward earnings multiple of 11.6. I also believe that the second Trump administration will put in place policies that will be beneficial for midstream companies like Enterprise.

3. Pfizer

Trading below $27 per share.

Pfizer’s current forward dividend yield of 6.5% is the highest in 15 years. The company’s dividend seems secure: Management has consistently made maintaining and growing the dividend their top priority for capital allocation.

Some people might question whether buying Pfizer stock right now is a good idea. Several of Pfizer’s drugs will not be protected by patents in the next few years. Additionally, Pfizer estimates that it will lose around $1 billion in revenue this year due to the Inflation Reduction Act.

I am optimistic about Pfizer’s future prospects from mid-decade onwards. It has several newer products on track to drive growth and an encouraging lineup of products in clinical trials. Considering shares are trading at less than nine times forward earnings, I believe the stock is significantly undervalued.

Is investing in Ares Capital a good opportunity with a $1,000 investment now?

Before investing in Ares Capital, it’s worth considering the following:

For investors to consider buying now … and Ares Capital wasn’t one of them. The ten stocks that were selected could produce huge returns in the coming years.

made this list as of April 15, 2005… if you’d invested $1,000 at the time of our initial suggestion,

The bounce-back of the S&P 500 since 2002.

View the top 10 stocks »

*The Stock Advisor portfolio returns as of January 13, 2025.

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