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Investing in Intelligent Dividend-Yielding Shares Within a $100 Budget at Present
Investing in Intelligent Dividend-Yielding Shares Within a $100 Budget at Present

Buying Smart Dividend Stocks on a $100 Budget Right Away

Investing a small sum can lead to big returns, especially with dividend stocks that reward you for owning them. Here's my list of smart picks for the best dividend stocks to buy with $100 right now:

1. Ares Capital (ARCC)

At about $23 per share, Ares Capital is within reach for an investment of $100. This stock offers an impressive 8.4% forward dividend yield.

What makes Ares Capital so appealing is its status as a business development company (BDC). BDCs, like Ares, are exempt from federal income taxes as long as they return at least 90% of their earnings to shareholders as dividends. Ares Capital's high earnings mean it can distribute a substantial portion to its shareholders, resulting in the attractive dividend yield.

The demand for direct lending offered by BDCs is on the rise due to several factors, such as speedy deal closings and reliable access to capital during volatile periods. The total addressable market for direct lending is more than $3 trillion, making Ares Capital an excellent choice for income-oriented investors.

Additionally, Ares Capital outshines its peers, boasting the largest publicly traded BDC presence, deep market relationships, and better dividend growth and total returns over the past 10 years than competitors.

2. Enterprise Products Partners (EPD)

A $34 investment will get you a unit of Enterprise Products Partners, a midstream energy leader. For around $100, you could buy two units, depending on the actual share price.

At its current forward distribution yield of 6.35%, Enterprise Products Partners offers a reliable income stream. The partnership has paid growth-boosting dividends for 26 consecutive years, providing a steady income return for shareholders.

Enterprise Products Partners' operations are less sensitive to inflation, as approximately 90% of its long-term contracts feature price escalation provisions. The company is also less affected by oil and gas price fluctations, as it charges the same rate to use its pipelines regardless of commodity prices.

With an attractive valuation and the potential for favorable policies under the second Trump administration, Enterprise Products Partners offers a compelling investment opportunity.

3. Pfizer (PFE)

Pfizer can be another attractive pick with your remaining $43 or so. One share of Pfizer currently costs around $27.

With a forward dividend yield of 6.5%, Pfizer offers an appealing income opportunity. Management consistently considers maintaining and growing the dividend as its priority, further strengthening the stock's appeal.

Although several Pfizer drugs will lose patent protection in the near future, it's important to consider the company's newer products, promising late-stage pipeline, and lower than 9 times forward earnings.

Each of these dividend stocks offers distinct advantages and potential risks, so consider your investment objectives and risk tolerance before making any investment decisions.

After investing in Ares Capital and Enterprise Products Partners, you might consider allocating your remaining funds to Pfizer. With a forward dividend yield of 6.5%, Pfizer provides an appealing income opportunity for investors. Moreover, the company prioritizes maintaining and growing its dividend, making it an attractive choice for income-focused investors. Financially prudent individuals looking to diversify their portfolio may find these three dividend stocks, including Ares Capital, Enterprise Products Partners, and Pfizer, to be potential investments for generating returns on their money invested in the finance and investing sector.

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