The Smartest Dividend Stocks to Buy With $300 Right Now

Key Points

• AbbVie is a Dividend King that has something to offer income, value, and growth investors.

• With market valuations at frothy levels, Dominion Energy's resilient business makes it a great stock to own.

• Enbridge has an exceptionally high dividend yield and should be able to deliver double-digit total returns.

• 10 stocks we like better than AbbVie ›

Are dividend stocks only for investors nearing or in retirement? Not at all. Consider that more than half of the S&P 500's (SNPINDEX: ^GSPC) total return over the last 50 years was due to reinvesting dividends.

Importantly, you don't need much money to begin making money with dividend stocks, either. Here are my picks for the smartest dividend stocks to buy with only $300 right now.

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 »

1. AbbVie

AbbVie (NYSE: ABBV) is a member of the elite group of stocks known as Dividend Kings. The big drugmaker has increased its dividend for 53 consecutive years. Its forward dividend yield of 3.44% is also attractive. And you can buy a share of AbbVie for around $191.

Income investors should like AbbVie for obvious reasons. However, I think value investors could find the pharma stock appealing, too. AbbVie's shares trade at only 15.6 times forward earnings. By comparison, the average forward earnings multiple for healthcare stocks in the S&P 500 is nearly 16.8.

AbbVie even has something to offer to growth investors. Although sales for the company's longtime top product, Humira, continue to decline in the face of biosimilar competition, AbbVie should deliver high-single-digit percentage revenue growth through the rest of the decade.

What about the potential impact of President Trump's threatened 200% tariffs on pharmaceutical imports? AbbVie manufactures many of its products overseas, but it also has significant (and growing) manufacturing operations in the U.S. I don't think the company will be affected any more than its peers.

2. Dominion Energy

One share of Dominion Energy (NYSE: D) will cost you around $57 right now. This investment will give you partial ownership in a top utility stock that pays a forward dividend yield of 4.67%.

With the Buffett indicator (the total market cap of all U.S. stocks divided by GDP, a valuation metric popularized by Warren Buffett) at an all-time high, stock market valuations have become so frothy that investors might want to prepare for a rocky road ahead. Dominion Energy's business is highly resilient, making the stock a great one to own during tumultuous market conditions.

The company provides electricity to 3.6 million homes and businesses in Virginia, North Carolina, and South Carolina. It also provides natural gas service to around 500,000 customers in South Carolina. In addition, Dominion is a top developer of offshore wind and solar power.

Image source: Getty Images.

Unlike the broader market, Dominion stock isn't priced at a sky-high premium. Its forward earnings multiple of 16.5 is lower than many of its peers. Dominion also should have solid long-term growth prospects, thanks to growing populations in the areas it serves and a booming data center market in its home state of Virginia.

3. Enbridge

I like Enbridge (NYSE: ENB) for many of the same reasons I like Dominion Energy. Its forward dividend yield of 6.17% is the juiciest of these three stocks. The company has increased its dividend for 30 consecutive years.

Like Dominion, Enbridge is a safe-haven stock during turbulent times. The company's pipelines transport crude oil, natural gas, and other hydrocarbons throughout the U.S. and Canada. Enbridge is also the largest natural gas utility in North America based on volume. Also, similar to Dominion, the company has expanded into renewable power. It's on track to deploy 500 megawatts of solar power generation capacity this year.

Enbridge expects to deliver average annual earnings growth of around 5% through the end of the decade. With its dividend included, I think the stock should be able to provide double-digit percentage total returns.

You'll pay a small premium for this stock, with Enbridge's shares trading at roughly 20.4 times forward earnings. However, I think the low-risk stability you'll get with Enbridge is worth it. By the way, you can buy one share each of AbbVie and Dominion and still have plenty of money remaining from an initial $300 to pick up a share of Enbridge, with its share price currently hovering around $44.

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Keith Speights has positions in AbbVie, Dominion Energy, and Enbridge. The Motley Fool has positions in and recommends AbbVie and Enbridge. The Motley Fool recommends Dominion Energy. The Motley Fool has a disclosure policy.