The Smartest Dividend Stocks to Buy With $1,000 Right Now

Buying dividend stocks can be a smart move just as 2025 comes to a close, but some picks are better than others. Some dividend stocks manage to outperform the S&P 500, while others lose value.

Dividend stocks are particularly appealing if they provide consistent returns, as some people prefer low-volatility investments as they approach retirement. The stocks on this list are durable companies that have been around for decades.

If you have $1,000 to invest in dividend stocks, you may want to consider these picks.

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Charles Schwab is overlooked compared to other brokerage firms

When most investors think of high-growth fintech stocks that provide brokerage services, they gravitate toward Robinhood and Interactive Brokers. However, Charles Schwab (NYSE: SCHW) delivered excellent growth rates as investors make more trades and the firm makes an aggressive push into crypto.

Schwab will offer spot trading for Bitcoin and Ethereum next year. That move has worked well for Robinhood and Interactive Brokers, and it can boost Schwab's profits.

For instance, Robinhood's crypto segment brought in $268 million in the third quarter, improving by more than 300% year over year. Crypto came to more than 20% of Robinhood's total revenue. The industry's significant growth trajectory bodes well for future financial results.

Schwab's financial growth has been strong leading into the spot crypto trading launch.

The financial firm reported its fourth consecutive quarter of 1 million brokerage account openings and grew its revenue by 27% year-over-year in Q3.

Schwab's daily average trading volume also increased by 30% from the previous year, indicating that its existing customer base is becoming more active. Higher engagement, combined with the influx of new investors expected to arrive when crypto spot trading becomes available on the platform in 2026, suggests a multi-year rally for the stock. Schwab's dividend yield is currently above 1%, but it is unlikely to remain that way for long.

Verizon is a stable dividend stock that pays a high cash flow

Verizon Communications (NYSE: VZ) isn't typically a stock that outperforms the S&P 500, but it offers a dividend yield of nearly 7% and a beta of 0.3, indicating it has significantly less volatility than the average stock.

The telecom giant makes most of its money from recurring monthly wireless plans. This predictable cash flow contributed to Verizon's 19th consecutive annual dividend hike.

Artificial intelligence (AI) can also turn into a catalyst for Verizon. Its 5G network already powers many AI tools, but AI infrastructure build-outs require fiber optic cables. That's part of the reason Verizon recently partnered with Amazon to build high-capacity fiber pathways to connect Amazon Web Services (AWS) data center locations.

Verizon has a reputation as a high-yield stock that's ideal for retirees seeking low volatility. AI may spark some growth that adds value to the stock beyond its high dividend payouts.

American Express delivers rising revenue and profit margins

American Express (NYSE: AXP) is one of the three credit card giants that benefit as consumer spending goes up. Not only are people spending more money, but American Express is becoming more popular among Gen Z, which will dictate consumer spending in the future.

The long-term growth tailwind of Gen Z adoption is a testament to the company's continued financial success. Revenue increased by 11% year over year in Q3. American Express reported 16% net income growth during the same quarter, indicating sustainable growth, and rising profits pave the way for potential high dividend hikes.

American Express stock has a yield just below 1%, but the company raised its dividend by 17% earlier this year. That dividend hike positions American Express as a top dividend growth stock.

Strong Cyber Monday sales suggest that American Express can deliver another round of solid results when it reports Q4 earnings. It wouldn't be the first time a successful Cyber Monday was a tailwind for American Express. The credit card issuer beat earnings estimates in Q4 2024 and cited strong holiday spending as a key reason, and it looks poised to repeat that trend.

American Express is an advertising partner of Motley Fool Money. Charles Schwab is an advertising partner of Motley Fool Money. Marc Guberti has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Bitcoin, Ethereum, and Interactive Brokers Group. The Motley Fool recommends Charles Schwab and Verizon Communications and recommends the following options: long January 2027 $43.75 calls on Interactive Brokers Group, short December 2025 $95 calls on Charles Schwab, and short January 2027 $46.25 calls on Interactive Brokers Group. The Motley Fool has a disclosure policy.