The Smartest Dividend Stocks to Buy With $2,000 Right Now

If you have $2,000 today, you need to think carefully about which dividend stocks you want to buy. After all, the market is still near all-time highs, and valuations seem stretched throughout Wall Street. The smartest places to look right now are probably the areas where others aren't looking. This contrarian approach will lead you to stocks like Rexford Industrial (NYSE: REXR), Realty Income (NYSE: O), and Toronto-Dominion Bank (NYSE: TD). Here's a look at why each one is an attractive income option today.

1. Rexford Industrial is hyperfocused

The concern around Rexford can be summed up in one word: tariffs. This is because the real estate investment trust (REIT) is focused on industrial assets like warehouses in Southern California. That's an unusually tight focus in the REIT sector and one that places Rexford at great risk if the current tariff upheaval leads to a material decline in imports from Asia. This is why the REIT has a yield of 5% versus the average REIT yield of 4.1%.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

Sure, there will be some short-term turbulence, but it seems highly likely that global trade will adjust to whatever changes are made on the tariff front. And then Rexford will appear well positioned again and likely afforded a higher valuation. In the meantime, however, the REIT will do what it has always done, growing via acquisitions and redevelopment. It is worth noting that Rexford has managed to grow its dividend at a compound annual rate of around 10% over the past decade. The most recent increase was a bit below 10%, but still much faster than most REITs. If you are a dividend growth investor, the current market concern about its regional and property focus is an opportunity to buy Rexford while its yield is near all-time highs.

Image source: Getty Images.

2. Realty Income is a boring tortoise and has an attractive yield

Realty Income's dividend yield is 5.8% and backed by a 30-year streak of annual dividend increases. The problem is that this REIT is a bit of a snore, with dividend growth averaging around 4% a year over that three-decade span. It's not exactly something you'd brag about at a cocktail party.

But don't overlook Realty Income; it is financially strong, and incredibly reliable. It is also one of the largest REITs you can buy and one of the most diversified, with retail and industrial assets spread across North America and Europe. The business is built on the net lease model, in which Realty Income often buys properties directly from companies that immediately lease them back (and pay for most property-level operating expenses). It is more of a financing transaction for the seller than anything else, allowing them to raise cash while retaining effective control of a vital asset.

Realty Income's size and financial strength give it advantaged access to capital markets and the capacity to take on deals that smaller peers couldn't even consider. It is a strong foundational investment for just about any dividend portfolio. While you probably shouldn't expect huge dividend growth, slow and steady seems highly likely to continue for years to come.

3. Toronto-Dominion Bank is a low-risk turnaround

Toronto-Dominion Bank, or TD Bank, is one of the largest banks in North America. It hails from Canada, where it is one of a small handful of banks with entrenched and dominant positions. This foundational business remains strong. The company's U.S. banking business, however, is facing headwinds. That's why investors are downbeat on TD Bank, pushing the yield up toward historical highs at 4.6%.

To sum it up, TD Bank's U.S. business was used for money laundering. Regulators found out and have demanded changes to the bank's internal controls. Until those changes are made, TD Bank's U.S. division won't be allowed to grow. TD Bank's U.S. division was expected to be the company's growth engine. That's a problem, but the bank is still financially strong and its Canadian operations are unaffected. It will likely muddle through this difficult period and start growing in the U.S. market again.

While this situation may take a few years to play out, the average bank is only yielding 2.7%. In other words, TD Bank is a low-risk but high-yield turnaround story. For more aggressive investors, that will probably be worth a deep dive.

Three solid choices for dividend investors

Despite the S&P 500 index (SNPINDEX: ^GSPC) offering a tiny 1.3% yield, investors willing to dig a little can still find attractive dividend stocks. And, if you are careful, you can find high-yield options that aren't overly risky. That's exactly what you'll get if you invest $2,000 into stocks like Rexford, Realty Income, and TD Bank right now.

Should you invest $1,000 in Realty Income right now?

Before you buy stock in Realty Income, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Realty Income wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $651,761!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $826,263!*

Now, it’s worth noting Stock Advisor’s total average return is 978% — a market-crushing outperformance compared to 170% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of May 19, 2025

Reuben Gregg Brewer has positions in Realty Income and Toronto-Dominion Bank. The Motley Fool has positions in and recommends Realty Income. The Motley Fool has a disclosure policy.