EMA:CC - The Smartest Dividend Stocks to Buy With $400 Right Now
2024-03-06 21:30:00 ET
If you’re like me, you’re not exactly drowning in dough right now. You’re using extra cash to save, but perhaps still have a couple hundred bucks set aside to put towards future growth. And that growth right now remains focused on passive income. And that means, investing in dividend stocks.
So today we’re going to look at putting $100 towards one stock each of three strong companies that have a strong future ahead of them. Based not just on the company alone, but the sector as well. So let’s get into it.
Healthcare
The healthcare sector is a strong area where growth is expected over the long term. This will be driven by the aging population and increasing demand for medical services. Healthcare companies tend to also provide strong cash flow, with a history of paying reliable dividends.
One such stock is Chartwell Retirement Residences ( TSX:CSH.UN ). The retirement real estate company currently offers a 4.94% dividend yield, trading at just $12.30 per share as of writing. Those shares are now up a whopping 31% in the last year alone!
Yet there is likely to be even more growth from its investment in the retirement sector. There is a lot of growth potential in this area, especially as the company continues to expand not only its locations but also its offerings. It now offers everything from long-term care to retirement homes, with on-site services as well. So it’s certainly a strong investment for future dividend creation.
Utilities
Utility stocks are also some of the smartest dividend stocks to buy right now. These are regulated assets, providing utility commissions and therefore stable cash flow and predictable earnings. What’s more, they provide essential services with monopolies if not oligopolies in their local markets, making revenue stable.
No wonder then that a company like Emera ( TSX:EMA ) has done so well. Emera has a diversified set of assets in Canada, the United States, and other countries. Analysts in particular like the regulated asset approach, which ensures that stability. However, they also like its long history of dividend growth over the last decade, as well as its growth potential.
That growth comes from expanding its existing businesses into new markets, and that can create more growth for investors. Meanwhile, you can still grab a dividend yield at 6% as of writing! With shares still down 10% in the last year, though showing signs of improvement.
REITs
Then there are real estate investment trusts (REIT). These are an easy option among dividend stocks, but you have to get into a stable sector. That’s why I like industrial REITs, those that offer stability with very little need for many tenants in one building.
One such strong investment is Granite REIT ( TSX:GRT.UN ). This company owns industrial properties across North America and Europe. It holds a diversified portfolio with properties in various locations and sectors, thereby mitigating risk. It has an experienced management team as well that has a proven track record of acquiring and managing properties in all of these locations.
What’s more, it has performed quite well. Shares of Granite stock are up 19% in the last year, and now offer a dividend yield at 4.37% as of writing. So again, it’s quite the strong investment among dividend stocks today.
Consumer staples
Finally, consumer staples are another means of great dividend creation. We need essential items no matter what. My kids are going to demand milk every morning, and it won’t matter the price. Which is why they do well even in high interest rate environments.
One company that investors may want to consider in this case is The North West Company ( TSX:NWC ). The company has continued to see strong performance no matter what given its location in rural communities. This has meant that there really are few options, while being one of them is a strong long-term strategy for North West.
And it has proven fruitful, as North West stock is now up 12% in the last year, offering a 3.82% dividend yield as well as of writing. And as earnings continue to come in, it’s likely to only climb higher.
The post The Smartest Dividend Stocks to Buy With $400 Right Now appeared first on The Motley Fool Canada .
Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool recommends Emera, Granite Real Estate Investment Trust, and North West. The Motley Fool has a disclosure policy .
2024