The hottest dividend stocks to buy for $100

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A little money can go a long way. That’s especially true when you’re investing in stocks that pay to own.

I am of course referring to distribution stocks. There are many great stocks that offer attractive dividends and don’t cost much. Here are my picks for smart dividend stocks to buy now under $100.

You can take a share. Ares Capital (NASDAQ: ARCC ) Approximately $23 at current prices. I think doing this can be one of the best investments you can make, especially if you’re looking for an income.

Aris Capital’s dividend yield reached 8.4 percent. Why is the yield so high? Ares Capital a Business Development Company (BDC). To be exempt from federal income tax, BDCs must return at least 90% of their earnings to shareholders as dividends. And this will generate more income for the shareholders.

The main reason is the nature of the company’s business. Demand for direct loans offered by BDCs is increasing for a number of reasons, including the speed of loan closings and reliable access to capital during volatile times. The total potential market for direct lending is about $3 trillion, with the traditional middle market for US companies with annual revenues of $100 million to $1 billion. If companies with more than $1 billion in annual revenue are included, it jumps to $5.4 trillion.

Also, Ares Capital stands head and shoulders above its peers. It is the largest publicly traded BDC, and has deep connections in the market. It has also experienced higher dividend growth and gross profit growth than its top rivals over the past 10 years.

Another $34 or more will buy you a share Enterprise product partners (NYSE: EPD ). Technically, you get a midstream energy-leading unit instead of a shared one, because a Limited Partnership (LP). Investing in LPs comes with some tax complications, but I think Enterprise Products Partners is worth the extra work.

The enterprise’s forward distribution yield was recently above 6.35%. Want even better news? LP has increased circulation for 26 consecutive years.

I love that the Enterprise Products Partners business has held up well in times of recession and crisis. Inflation is less affected because approximately 90% of long-term contracts include inflation. The enterprise’s cash flow does not fluctuate with oil and gas price fluctuations, or; It costs the same amount to use the pipelines regardless of commodity prices.

These are not the only reasons why enterprise is a smart investment today. The valuation is attractive, with a forward earnings ratio of 11.6. Second, I think the Trump administration will implement favorable policies for midstream companies like Enterprise.

After investing in Ares Capital and Enterprise Products Partners, you should have $43 in the ballpark left over from your initial $100. That’s more than enough to buy a share. Pfizer (NYSE: PFE )It currently trades below $27 per share.

Pfizer’s current dividend yield of 6.5% is close to its highest level in 15 years. The drugmaker’s dividend also appears to be safe: Management will continue to maintain its dividend and grow, making the company’s top capital allocation a priority.

Of course, some may think that buying Pfizer now is a very smart idea. Several of the company’s drugs will lose patent protection in the next few years. In addition, Pfizer estimates a negative impact of about $1 billion on revenue this year from the inflation-reduction legislation.

But I like Pfizer’s prospects for the second half of the decade. It has several new products in development and a promising late-stage pipeline. With the stock trading at less than 9 times earnings, the stock is also cheap.

Before buying shares in Aris Capital, consider this:

of Motley Fool Stock Advisor A panel of analysts identified what they believed. 10 best stocks Investors should buy now… and Ares Capital was not one of them. 10 stocks that made the cut could make monster returns in the coming years.

Think about when Nivea Created this list on Apr 15, 2005… If you invest $1,000 during our recommendation, You will have $843,960!*

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Keith Spitz He has held positions at Ares Capital, Enterprise Products Partners and Pfizer. He has positions in the Motley Fool and recommends Pfizer. Motley Fool Recommends Enterprise Products Partners. The Motley Fool has Disclosure Policy.

The hottest dividend stocks you can buy for $100 right now Originally published by The Motley Fool.