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Despite all the talk about rising interest rates and inflation, the market is on the rise this year, up 6%. Over the past 12-month period, the market is up almost 10%. Some of the smartest dividend stocks on the market are trading at decent levels right now.
Here's a look at some of the smartest dividend stocks to buy now, even with just $400 to start.
You can't go wrong with this action
Most investors are familiar with Enbridge (TSX:ENB). The energy infrastructure giant operates a network of gas pipelines that transport huge quantities of crude oil and natural gas. Beyond that, Enbridge also has a strong renewable energy unit and natural gas service.
Together, those segments make Enbridge a very defensive option to consider. They also generate a reliable and growing source of income for the company.
Perhaps most importantly, that stable income stream allows Enbridge to offer investors one of the smartest dividend payments on the market. At the time of writing, Enbridge's quarterly dividend provides an incredible 7.52% yield.
For new investors starting with just $400, that's equivalent to just over 8 shares. That's not enough to retire, but it is enough to start building a portfolio that can be enhanced with additional investments over time.
Even better, Enbridge has provided investors with annual increases to its dividend for three decades without fail. That fact alone makes Enbridge a great buy-and-forget option. Add in a reliable business and a juicy yield and you have one of the smartest dividend stocks on the market.
Oh, and let's not forget that while the market is up double digits over the past 12 months, Enbridge is down almost 7% over that same period.
Growth and Income: This Stock Offers Both
It would be impossible to compile a list of some of the smartest dividend stocks without mentioning at least one of Canada's big banks. The big bank investors should pay attention to right now is Canadian Imperial Bank of Commerce (TSX:CM).
CIBC is neither the largest nor the best-known of Canada's big banks. However, it offers a mature domestic segment, some international exposure and a juicy dividend.
The quarterly dividend currently offered pays a juicy yield of 5.32%, making it an ideal option for investors to consider. Another key advantage is CIBC's share price. The bank trades at just over $65 per share, which translates to a lower cost of entry than its peers. For investors with $400 to start their portfolios, that's equivalent to just under six stocks.
Like Enbridge, an investment in CIBC should be viewed as a long-term endeavor with additional investments over time. The bank has also provided investors with attractive annual increases without fail for years.
Buy these stocks today and forget about them for a decade. Or more.
One last stock to add to the list of smartest dividend stocks to buy is Fortis (TSX:FTS). Fortis is one of the largest utilities in North America. Utilities operate one of, if not the most defensive business models in the world.
In short, utility companies are contractually obligated to provide a service for which they receive compensation. These contracts are regulated and often last for several decades. This means that utilities like Fortis get a recurring income stream that allows them to invest in growth and pay a good dividend.
In the case of Fortis, that dividend is paid quarterly and currently stands at a tasty 4.42%, making it a solid option for any portfolio. Fortis is also one of two stocks in Canada that is considered the Dividend King with 50 consecutive years of dividend increases.
That alone makes Fortis a buy-and-forget candidate. Add in the stable, recurring income it generates and you have one of the best and smartest dividend stocks on the market.
Final thoughts
Enbridge, CIBC, and Fortis offer investors growth and income potential, making them some of the smartest dividend stocks to buy.
More importantly, they also offer some defensive appeal, which, in my opinion, makes them excellent candidates for any well-diversified portfolio.
