The Smartest Dividend Stocks to Buy With $5,700 Right Now
High interest rates have weighed on Realty Income, making the stock a high-yield bargain.
Hormel Foods is poised to continue building on decades of steady performance.
Booking Holdings is new to the dividend landscape, but it won't stay under the radar for long.
10 stocks we like better than Realty Income ›
Buying stocks is especially fun when you're a dividend investor. Every share means more annual dividend income for your portfolio.
Any time you can buy a dividend stock for less than you believe it's worth, that's a smart buy. It's subjective, but there are several dividend stocks in the market right now, sitting at compelling prices that make sense for long-term investors.
Here are three examples. Even if you don't have $5,700 to spend, it's not a big deal since most brokerage accounts allow you to purchase fractional shares these days.
Realty Income (NYSE: O) is one of the best real estate investment trusts (REITs) that you'll come across. The company invests in and leases commercial real estate. Since REITs must pay out at least 90% of their taxable income to shareholders as dividends, they are naturally excellent dividend stocks. Realty Income yields a juicy 5.75% at its current share price, and pays a monthly dividend, something not many companies do.
But what makes Realty Income such a good business? Look to its rock-solid fundamentals, including a diverse real estate portfolio, net lease model, and investment-grade balance sheet. The company has managed to raise its dividend for more than 30 consecutive years, despite enduring some of the worst hardships the real estate market has faced, including the COVID-19 pandemic and the 2007-2009 financial crisis.
However, the stock is down 29% from its all-time high. Realty Income often uses debt to acquire new properties and grow. Interest rates have continued to rise, which can raise borrowing costs, slow growth, and, consequently, weigh on Realty Income's share price. Trading at just 14 times its funds from operations, Realty Income is a bargain that will likely continue to pay you increasingly more over time.
Hormel Foods (NYSE: HRL) offers consistency that few companies can. The Dividend King has increased its payout for 59 consecutive years and has paid dividends for nearly a century without fail. Most known for its Spam brand of canned meat, Hormel owns a portfolio of food and snack brands, including Spam, Jennie-O, Dinty Moore, Applegate, Planters, and Skippy. The stock's 3.8% dividend yield establishes a solid floor for annual investment returns.
Plus, you don't grow for generations by accident; the company has demonstrated its ability to adapt to changing consumer tastes and needs over the years. It has launched and acquired brands to shift its portfolio into growing categories, such as healthy and high-protein offerings, as well as snacks. Management aims to grow Hormel's net sales by an average of 2% to 3% annually and operating profits by 5% to 7% annually over the long term.
Investors can feel good about the dividend's safety. The payout ratio is manageable at 72% of 2025 earnings estimates, backed by an investment-grade balance sheet. The stock currently trades at 19 times estimated 2025 earnings, a reasonable valuation for a stock with Hormel's combination of dividend yield and resilient mid-single-digit earnings growth.
Booking Holdings (NASDAQ: BKNG) is the budget buster on this list with a recent share price around $5,600. But remember, many brokerages allow you to buy fractional shares, so don't pass on this emerging dividend rockstar because of its share price.
The company has become a global technology leader in the hospitality and travel industries, with its five primary brands: Booking.com, Priceline, agoda, Kayak, and OpenTable.
The stock only began paying a dividend last year, so it may not be on the radar for most dividend investors. That could soon change. Booking Holdings comes packed with dividend growth potential. Its payout ratio is just 18% of the company's 2025 earnings estimates, and analysts expect earnings to grow by an average of 15% annually over the next three to five years. The dividend could grow by leaps and bounds for quite a while.
Despite trading near its all-time highs, Booking Holdings offers value at its price. The stock trades at 26 times its 2025 earnings estimates, an attractive valuation given the anticipated mid-teens earnings growth and numerous years of dividend increases ahead. Investors who buy now should see their yield on cost skyrocket from its current 0.7% starting point. Booking Holdings' one-two punch of dividends and capital gains upside makes it a brilliant buy right now.
Before you buy stock in Realty Income, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Realty Income wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $649,102!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $882,344!*
Now, it's worth noting Stock Advisor's total average return is 996% — a market-crushing outperformance compared to 174% for the S&P 500. Don't miss out on the latest top 10 list, available when you join .
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*Stock Advisor returns as of June 9, 2025
Justin Pope has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Booking Holdings and Realty Income. The Motley Fool has a disclosure policy.
The Smartest Dividend Stocks to Buy With $5,700 Right Now was originally published by The Motley Fool
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