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

After a roughly 2.5-year bull market, the Trump administration's tariffs have crushed the market, leading to significant volatility. Investors seem to be living and dying by the daily news cycle, with the Dow Jones Industrial Average experiencing multiple 1,000-point moves in April.

In times of such uncertainty, it can be a good idea to look for stocks that generate reliable and consistent passive income through dividends, so you can worry less about the stock price in the near term.

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

Here are the smartest dividend stocks to buy with $2,000.

1. Realty Income -- 5.5% dividend yield

The real estate investment trust (REIT) Realty Income (NYSE: O) calls itself "The Monthly Dividend Company." While that may sound cocky to some, it lives up to the title. Not only does Realty Income pay a high 5.5% dividend yield, but it also recently paid its 658th consecutive monthly dividend and has increased its dividend for 30 straight years.

Realty Income has a portfolio of more than 15,600 properties. It's a triple net lease operator, which means that the company rents properties out to tenants that cover costs including maintenance, property taxes, and insurance.

For the landlords, the setup seems like a no-brainer. It can also be beneficial for the renters because they have more freedom to customize the properties and may also be able to negotiate lower rents or longer rental contracts for taking on the added responsibility and costs.

Realty Income operates properties in all 50 states in the U.S., the United Kingdom, and several other countries in Europe. It also focuses on renting its properties to businesses that are nondiscretionary, low price point, and service oriented -- think convenience, grocery, home improvement, and dollar stores. The company has also been expanding into other burgeoning sectors such as gaming and data centers, which are helping to fuel expansion.

Realty Income regularly generates enough adjusted funds from operations (AFFO) to cover its dividend. AFFO is a special metric that REIT investors use to evaluate cash flow. Looking at AFFO is a good way to evaluate cash available for dividend distributions. In 2023 and 2024, Realty Income paid dividends equal to roughly 75% and 76% of AFFO, respectively.

2. Coca-Cola -- 2.8% dividend yield

The iconic beverage company Coca-Cola (NYSE: KO) has long been a stalwart of Warren Buffett's portfolio -- and it's easy to see why the Oracle of Omaha likes the company. In February, the company approved its 63rd annual consecutive dividend increase, putting it among an elite group of dividend stocks. Coca-Cola has now paid more than $93 billion in dividends to shareholders since 2010.

The stock has also crushed the broader market and is up more than 18% this year, setting itself apart from the pack. While tariffs have hit the broader market, investors sought pockets of safety and clearly identified Coca-Cola as a port in the storm among consumer staple stocks.

The company has a global brand and has diversified its product set to include various beverages from soda to water to alcoholic drinks. Consumers are likely to keep buying Coca-Cola products through the economic cycle, and the company said earlier this year that it can focus on plastic packaging if aluminum tariffs become a problem. In the fourth quarter, the company reported solid revenue growth fueled by its sparkling division.

Coca-Cola regularly generates enough free cash flow and earnings to cover its dividend. Looking at adjusted earnings in 2024, Coca-Cola had a roughly 70% payout ratio (dividends divided by earnings). Adjusted free cash flow, excluding an IRS tax litigation charge, was $10.8 billion, while dividends amounted to $8.4 billion.

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

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Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Realty Income. The Motley Fool has a disclosure policy.