The Smartest Dividend Stocks You Can Buy Now for $400

Dividend stocks can be very smart investments. They have historically achieved market-beating total returns.

The best returns came from companies that increased their dividends. They have returned an average of 10.2% per year over the past 50 years, according to Ned Davis Research and Hartford Funds. It exceeds equal weight. S&P 500 It is a company with no index (7.7% annualized rate) and dividend policy change (6.6% annualized rate).

There are many good dividend stocks. Enbridge (ENB 0.72%) and prologue (PLD 0.80%) It currently stands out as one of the smartest dividend stocks to buy for those with about $400 to invest. They offer higher yield payouts that will continue to increase in the future. This puts them in a strong position to deliver market-beating returns here.

Power to continue generating strong total returns

Enbridge has been a very rich dividend stock for many years. The Canadian energy infrastructure giant has delivered total returns of 12.3% per year since 2000, outperforming the S&P 500’s total return of 9.1% per year. At that rate, Enbridge would have grown a $400 investment to nearly $5,300. That’s almost double the return you’d get if you invested the same investment in an S&P 500 index fund.

that much pipeline and public service The company should have enough fuel to continue enriching its shareholders in the future. Enbridge pays a very generous dividend (currently yielding 7.5%), giving investors a very good underlying yield.

The payout is on a very solid footing. Enbridge pays a relatively conservative dividend (60%-70%) while generating highly predictable cash flow (98% of which comes from long-term contracts and government-regulated rate structures). This allows the company to maintain meaningful cash flow to fund new investments.

Enbridge has the financial capacity (reserved cash flow and balance sheet flexibility) to fund the investments needed to grow its earnings at approximately 5% per annum over the medium term. There is already a lot of growth in store. The company agreed to purchase three natural gas utilities earlier this year in a transformational deal that will boost revenue in the near term and strengthen its long-term growth prospects.

Enbridge also has a multi-billion dollar backlog of commercially secured capital projects. There is a long list of expansion projects under construction that will come online by 2028. These growth drivers should provide enough fuel for Enbridge to increase its dividend for the 29th consecutive year.

With a dividend yield above 7% and earnings growing about 5% annually, Enbridge has the power to potentially generate double-digit total returns in the coming years.

lots of internal growth

Prologis has also enriched investors over the years. that much Industrial REITs Since 2000, it has achieved an average annual total return of 12.4%. This grew a $400 investment into over $6,500.

Warehouse operators are in a strong position to continue to increase shareholder value. It pays a solid dividend (currently yielding 2.6%) that has grown rapidly over the years. Prologis has grown its payout at an average annual rate of 12% over the past five years, twice as fast as the S&P 500 average.

The REIT is well-positioned to continue growing its earnings and dividends at an above-average rate. The biggest driver is built-in rent growth.

Prologis typically enters into long-term leases with tenants that increase rent at low single-digit annual rates. Because of this, it hasn’t fully captured the surge in warehouse rents in recent years. The company expects same-store net operating income to increase 9% to 10% annually over the next several years as legacy leases expire and prices adjust to higher market lease rates.

The company will also be boosted by development projects and essential platforms (renewable energy and mobility products). These catalysts enable the company to provide 9% to 11% of its annual operating funds (FFO) Growth per share until at least 2026. There is also upside potential through acquisitions and growing our strategic capital platform.

These drivers allow the company to continue growing its dividend at an above-average rate. This combination of dividend income growth and earnings growth puts Prologis in a strong position to continue generating market-beating total returns.

Dividend Stocks That Create Wealth

Enbridge and Prologis have been fantastic investments over the years. They have been able to grow their earnings at a reasonable rate and pay attractive, steadily increasing dividends. They are well positioned to continue growing profits and payouts in the future.

This will give them the fuel to continue generating market-beating total returns. That’s why it looks like a smart dividend stock to buy right now, even if you don’t have a lot of money to invest.