The Smartest Dividend Stocks to Buy With $100 Right Now

Just a little money can go a great distance. That is especially the case once you put money into stocks that pay you to own them.

I’m referring to dividend stocks, in fact. There are many great stocks that supply attractive dividends and do not cost an excessive amount of. Listed below are my picks for the neatest dividend stocks to purchase with $100 at once.

You possibly can scoop up a share of Ares Capital (NASDAQ: ARCC) for roughly $23 at its current price. I believe doing so is perhaps among the finest investments you’ll be able to make, especially when you’re in search of income.

Ares Capital’s forward dividend yield stands at 8.4%. Why is the yield so high? Ares Capital is a business development company (BDC). To be exempt from federal income taxes, BDCs must return at the least 90% of their earnings to shareholders as dividends. And this one generates quite a lot of earnings for its shareholders.

A key reason is the character of the corporate’s business. The demand for direct lending offered by BDCs is rising because of several aspects, including the speed of closing deals, and reliable access to capital during volatile periods. The overall addressable marketplace for direct lending is around $3 trillion for the standard middle market of U.S. corporations with annual revenue between $100 million and $1 billion. It jumps to $5.4 trillion if corporations with annual revenue of over $1 billion are included.

Also, Ares Capital stands head and shoulders above its peers. It’s the biggest publicly traded BDC, and has deep relationships out there. It also has delivered greater dividend-per-share growth and total returns over the past 10 years than its top rivals.

One other $34 or so will buy you a share of Enterprise Products Partners (NYSE: EPD). Technically, you will get a unit of the midstream energy leader quite than a share, since it’s a limited partnership (LP). Investing in LPs comes with some tax hassles, but I believe Enterprise Products Partners is definitely worth the extra work.

Enterprise’s forward distribution yield was recently over 6.35%. Want even higher news? The LP has increased its distribution for 26 consecutive years.

I like that Enterprise Products Partners’ business holds up well during recessions and turbulent times. Inflation doesn’t impact it very much because roughly 90% of its long-term contracts feature price escalation provisions. Enterprise’s money flow doesn’t ebb and flow with oil and gas price fluctuations, either; it charges the identical amount for using its pipelines no matter commodity prices.

Those aren’t the one the explanation why Enterprise is a great investment at once. Its valuation is attractive, with a forward earnings multiple of 11.6. I also think the second Trump administration will implement favorable policies for midstream corporations like Enterprise.

After investing in Ares Capital and Enterprise Products Partners, it is best to have within the ballpark of $43 left over out of your initial $100. That is good enough to purchase one share of Pfizer (NYSE: PFE), which currently trades below $27 per share.

Pfizer’s current forward dividend yield of 6.5% is near its highest level in 15 years. The drugmaker’s dividend appears to be secure, too: Management consistently places maintaining and growing the dividend as the corporate’s top capital allocation priority.

Granted, some might wonder if buying Pfizer now could be such a sensible idea. Several of the corporate’s drugs will lose patent protection over the following few years. Pfizer also estimates a negative impact of around $1 billion on its revenue this yr from the Inflation Reduction Act.

I like Pfizer’s prospects over the second half of the last decade, though. It has multiple newer products driving growth and a promising late-stage pipeline. With shares trading below 9 times forward earnings, the stock can be dirt low cost.

Before you purchase stock in Ares Capital, consider this:

The Motley Idiot Stock Advisor analyst team just identified what they consider are the 10 best stocks for investors to purchase now… and Ares Capital wasn’t one in all them. The ten stocks that made the cut could produce monster returns in the approaching years.

Consider when Nvidia made this list on April 15, 2005… when you invested $1,000 on the time of our suggestion, you’d have $843,960!*

Stock Advisor provides investors with an easy-to-follow blueprint for achievement, including guidance on constructing a portfolio, regular updates from analysts, and two recent stock picks every month. The Stock Advisor service has greater than quadrupled the return of S&P 500 since 2002*.

See the ten stocks »

*Stock Advisor returns as of January 13, 2025

Keith Speights has positions in Ares Capital, Enterprise Products Partners, and Pfizer. The Motley Idiot has positions in and recommends Pfizer. The Motley Idiot recommends Enterprise Products Partners. The Motley Idiot has a disclosure policy.

The Smartest Dividend Stocks to Buy With $100 Right Now was originally published by The Motley Idiot

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The Smartest Dividend Stocks to Buy With $100 Right Now

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