The Smartest Dividend Stocks to Buy With $10,000 Right Now

This combination of four stocks will work together to cover multiple bases for passive income investors seeking to generate a couple of thousand dollars per year on a $40,000 investment.

Offering an average yield of 5.8%, the four stocks combine a monthly income payer, the JP Morgan Nasdaq Equity Premium Income ETF (NASDAQ: JEPQ), one integrated energy major on an excellent risk/reward valuation, Chevron (NYSE: CVX), and for investors who like dividend stocks with some upside potential there's Watsco (NYSE: WSO), and Whirlpool (NYSE: WHR). The monthly income is helpful because you can use it to top up a holding in one of the four stocks on any market-led weakness.

JPMorgan Nasdaq Equity Premium Income ETF: Trailing distribution yield 11.1%

This exchange-traded fund (ETF) and its sister ETF, the JP Morgan Equity Premium ETF, have been covered in more detail previously. However, for new investors looking at the ETF, it's worth briefly noting that its strategy is to buy Nasdaq-focused equities (up to 80% of its net assets) with up to 20% of its net assets in equity-linked notes (ELNs) that follow a strategy of selling monthly call options in the Nasdaq index.

It's a strategy designed to generate income by collecting premiums on the ELNs when the market falls or moves moderately throughout the month. When the market moves significantly higher, the ELN strategy will incur losses; however, the equity holdings are expected to increase in value.

In short, it's a strategy designed to limit downside exposure to equities (via the ELNs) and participate in some of the upside (via equity holdings), all while generating monthly income that can be reinvested in the ETF or used as passive income.

Chevron: Dividend yield 4.3%

The integrated major combines upstream energy assets (exploration and production) with downstream assets (refining and chemicals). The former does well when energy prices are rising, and the latter contributes relatively more when energy prices are falling.

Chevron has a combination of a relatively balanced approach and a rock-solid balance sheet (the Wall Street consensus has Chevron generating $47.8 billion in earnings before interest, taxation, depreciation, and amortization, or EBITDA in 2026 compared to $37.7 billion in net debt). This makes Chevron an ideal choice for conservative investors looking for some upside from the price of oil combined with some downside protection if the price doesn't decline sharply from here.

Watsco: Dividend yield 3%

The heating, ventilation, air conditioning, and refrigeration (HVACR) parts and supplies distributors have been an astonishing value generator for long-term investors. It has generated a total return (meaning dividends are reinvested into stock) of 1,370% over the last 20 years and 360% in the previous 10 years. However, the stock has declined by more than 17% over the prior year.

The reason for the decline stems from what management describes as "soft market conditions" caused by a regulatory-led product transition to A2L refrigerants. The new refrigerants have low toxicity and are more environmentally friendly than older refrigerants.

However, the transition is negatively impacting Watsco's business. That said, once the transition is complete, there's every reason to believe Watsco will return to the growth path, which includes its ongoing consolidation of a highly fragmented industry.Moreover, via its "buy-and-build" strategy, Watsco can continue expanding geographically by acquiring smaller distributors and helping them grow by giving them access to its technological offerings as well as inventory.

Whirlpool: Dividend yield 4.7%

Whether investors like it or not, Whirlpool is an interest rate-sensitive stock, and trader-type investors will buy and sell the stock as a proxy for interest rate movements. This observation goes a long way toward explaining the run up in the stock price before the Federal Reserve cut interest rates (buy on the rumor) and the subsequent decline (sell on the news) after the cut.

Still, speculation aside, lower rates should help the housing market and, in turn, discretionary demand for major household appliances. That said, that's not the main case for buying the stock. Instead, the main upside potential for the stock comes from the imposition of tariffs on its Asian competitors, which will inevitably make Whirlpool's products (the company manufactures 80% of what it sells in the U.S.) more price-competitive within the U.S.

While the company navigates an extremely difficult environment in 2025 (Asian competitors preloaded the market ahead of tariffs, which were paused until the start of August), next year could see a marked improvement as its competitors will have sold down their inventory and now face tariffs on imported products.

Lee Samaha has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Chevron and Watsco. The Motley Fool recommends Whirlpool. The Motley Fool has a disclosure policy.