The Smartest Dividend Stocks to Buy With $100 Right Now

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A small amount of money can make a big difference. This is particularly true when you invest in stocks that provide returns by paying you to own them.

I'm referring to dividend stocks, of course. There are many great stocks that offer attractive dividends without breaking the bank. Here are my top picks for the smartest dividend stocks to invest with $100 right now.

to buy right now.

1. Ares Capital

For approximately $23 at the current price, I believe this could be one of the best investments you can make, especially if you're in the market for income.

To be exempt from federal income taxes, BDCs must return at least 90% of their earnings to their investors in the form of dividends. And this particular BDC is known for producing a significant amount of earnings for its investors.

A primary reason for the growth is the nature of the company's business. The demand for direct lending offered by BDCs is on the rise due to factors such as the speed of closing deals and the availability of reliable capital during uncertain times. The total possible market for direct lending is approximately $3 trillion for traditional U.S. companies with annual revenues between $100 million and $1 billion. This expands to $5.4 trillion when companies with annual revenues of over $1 billion are factored in.

In addition, Ares Capital surpasses its competitors in every aspect. As the biggest publicly traded BDC, it enjoys strong market connections and has successfully delivered higher growth in both dividend per share and total return over the past decade compared to the top BDCs.

2. Enterprise Products Partners

I think it's worth the hassle, investing in LPs, but Enterprise Products Partners in particular does present some tax-related headaches.

Enterprise's forward payout yield has been at 6.35% or more recently. The issuer has boosted its dividend for 26 consecutive years.

I appreciate that Enterprise Products Partners' business performs well even during economic downturns and uncertain periods. Inflation has a minimal impact on it because approximately 90% of its long-term agreements include provisions for price adjustments. Enterprise's cash flow isn't significantly affected by oil and gas price swings; it charges the same amount for utilizing its pipelines, regardless of commodity prices.

There are several reasons why Enterprise is a good investment choice right now. One reason is that the company's valuation is attractive, with its forward earnings multiple currently at 11.6. I also believe that a possible second presidential administration under Trump could establish policies beneficial to midstream companies like Enterprise.

3. Pfizer

trades for less than $27 per share.

Pfizer's current forward dividend yield of 6.5% is near its highest mark in about 15 years. The company's dividend also appears to be stable: management has repeatedly stated that maintaining and increasing the dividend is their top investment priority.

Some might question whether purchasing Pfizer's stock is a wise move now. A number of the company's medications are due to lose patent protection in the near future. Plus, Pfizer forecasts a $1 billion decline in revenue this year, primarily stemming from the Inflation Reduction Act.

I'm more optimistic about Pfizer's prospects for the second half of the decade, though. It has several new products that are driving growth and a promising pipeline of products in the later stages of development. With shares trading at less than nine times the company's predicted earnings, the stock is also very inexpensive.

Should you invest $1,000 in Ares Capital at this time?

Before investing in Ares Capital, take this into account:

For potential investors to buy now, and Ares Capital was not one of them. The 10 stocks that made the selection could generate enormous returns within the upcoming years.

This list was compiled on April 15, 2005. If you had invested $1,000 at the time of our recommendation,

The S&P 500's recovery since 2002.

Check out the top 10 stocks »

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