The Smartest TSX Dividend Stocks to Buy With $1,000 Right Now

the smartest tsx dividend stocks to buy with $1,000 right now

Woman has an idea

Investing in blue-chip dividend stocks with a growing payout is among the best strategies for building long-term wealth. Typically, dividend-growth stocks generate stable cash flows across market cycles, allowing them to raise payouts over time. Further, a sustainable payout allows companies to reinvest in growth, target accretive acquisitions, and strengthen the balance sheet, all of which should drive future cash flows higher.

Dividend stocks should enhance shareholder returns via capital gains in addition to a consistent stream of passive income. Keeping this in mind, here are the smartest TSX dividend stocks to buy with $1,000 right now.

Bank of Montreal stock

Bank of Montreal (TSX:BMO) has trailed the broader markets in the last two years due to higher interest rates, which have led to a tepid lending environment. Down 16% from all-time highs, BMO stock currently offers a tasty dividend yield of 4.7%, given its annual payout of $6.04 per share.

In the fiscal first quarter (Q1) of 2024 (ended in January), BMO reported a net income of $1.9 billion, or $2.56 per share, against a challenging macro backdrop, showcasing the strength of its diversified business lines. The environment has constrained revenue growth in market-sensitive businesses, which was offset by strong performance in the personal and commercial loan segments and acquisitions.

Similar to other companies, BMO is focused on optimizing its businesses and balance sheet while controlling costs and growing customer relationships to drive sustainable growth. BMO announced a few expense management commitments last year, which include US$800 million run rate cost synergies once the Bank of West acquisition is closed. Moreover, it is on track to deliver $400 million of expense savings by the end of 2024.

Analysts expect BMO to increase its adjusted earnings from $11.22 per share in fiscal 2024 to $12.3 per share in fiscal 2025. Priced at 12.1 times forward earnings, BMO stock is cheap and is an attractive buy especially if interest rates move lower.

Brookfield Asset Management stock

Another dividend stock part of the financial sector is Brookfield Asset Management (TSX:BAM), which offers you a forward yield of 3.8%. BAM is among the world’s largest alternative asset managers, with more than $1 trillion in assets under management (AUM).

BAM generates the majority of its earnings from fees, which depend on its AUM. Thus, an expansion of the AUM should translate to higher earnings, cash flows, and dividends.

According to Brookfield Asset Management, market sentiment has improved over the past year, resulting in higher liquidity and fund inflows. Investors’ higher risk appetites and a stronger-than-expected global economy should help Brookfield going forward. In fact, the asset manager raised US$20 billion in Q1 and has around US$100 billion in dry powder that can be used to invest in growth projects.

BAM emphasized that it enjoys a leadership position in verticals such as infrastructure, clean energy, and private credit, all of which are in high demand by institutional investors. These asset classes are at the epicentre of three megatrends, decarbonization, deglobalization, and digitalization, that are reshaping the global economy.

According to Brookfield, these sectors will attract more than US$200 trillion of capital in the next three decades, creating significant growth opportunities as the company builds products and services to address market needs.

Should you invest $1,000 in Brookfield Asset Management right now?

Before you buy stock in Brookfield Asset Management, consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Brookfield Asset Management wasn’t one of them. The 10 stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $18,271.97!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 32 percentage points since 2013*.

See the 10 stocks * Returns as of 5/21/24

More reading

    Fool contributor Aditya Raghunath has no position in any of the stocks mentioned. The Motley Fool recommends Brookfield Asset Management. The Motley Fool has a disclosure policy.

    OTHER NEWS

    20 minutes ago

    Reeves to tout Labour wealth fund plan at start of economy-focused campaign week

    20 minutes ago

    Australia sink brave Scots at T20 World Cup, England advance

    20 minutes ago

    Springboks: Another injury to top star! – UPDATE

    20 minutes ago

    'I was BLOWN away by this product': Give your skin the summer vacation it needs with this ultra-hydrating hyaluronic acid serum - and it's only $16!

    20 minutes ago

    'It looks so expensive!' Hitting the road this summer? Shoppers LOVE this two-piece carry-on and weekender set with space for your laptop, shoes, and even coffee - and you can save 20% today

    20 minutes ago

    No batteries, no charging! This spray mop comes with cleaning pods and a washable microfiber pad to leave your flooring SPOTLESS with no effort - and you can get it for 20% off right now

    20 minutes ago

    Petroleum Min Statement Re-affirms Govt's Commitment To Achieve 20% Ethanol Blending By 2025

    20 minutes ago

    Spare a prayer for Rishi? Britain's first PM of Indian heritage reveals he has turned to his Hindu faith to give him strength amid election campaign

    24 minutes ago

    Inside Out 2 fans ‘heartbroken’ over one key change from Pixar’s original

    24 minutes ago

    Woodward, Bernstein reflect on Watergate reporting 50 years later

    27 minutes ago

    12 Little Known Facts About Glen Powell

    27 minutes ago

    A school board reinstated Confederate names. It split the community again.

    27 minutes ago

    Corrie's Claire Sweeney admits nerves around filming with 'fascinating' legend

    27 minutes ago

    Yimbies welcome Labor’s plan for more housing in Melbourne and Geelong but question priorities

    27 minutes ago

    Advisors ‘wary’ of bitcoin ETFs are on a slow adoption journey, says BlackRock exec

    32 minutes ago

    Bec Judd reveals what really happened to THAT red dress which launched her career at the 2004 Brownlow

    32 minutes ago

    Gareth Southgate reveals he will make a late call on Luke Shaw as he reveals every England player trained ahead of their Euro 2024 opener against Serbia

    32 minutes ago

    Half of travelers are avoiding Boeing planes in wake of safety incidents

    32 minutes ago

    England stars 'set to pocket record bonus if they win Euro 2024', with Gareth Southgate in line for a bumper pay packet and 'two Three Lions poised to split an almost £10MILLION kitty'

    33 minutes ago

    David Moyes recalls awkward moment he was caught on camera singing THAT vulgar West Ham chant about Jarrod Bowen and partner Dani Dyer

    33 minutes ago

    Proof of Bible story about angels killing 185,000 soldiers in a night is uncovered after 2,700 years

    33 minutes ago

    Japan did it first. Chinese stocks with some of the biggest global upside

    34 minutes ago

    Gareth Southgate offers huge Luke Shaw injury update ahead of England's Euro 2024 opener

    34 minutes ago

    Super League: Leigh Leopards boss Adrian Lam vows his side 'can match anyone' after Catalans win

    34 minutes ago

    ‘My mother’s death left me with an urgent mission’: Rachael Stirling on sharing Diana Rigg’s views on assisted dying

    34 minutes ago

    Szoboszlai RECORD, Van Dijk UPDATE, Keane on Robbo - Liverpool FC news recap

    34 minutes ago

    Princess Charlotte's sweet act on carriage ride to stop rain ruining Trooping parade

    34 minutes ago

    Here's every iPhone model that will receive Apple's iOS 18 update (and which ones can't)

    34 minutes ago

    2 killed and several wounded in shooting during a Juneteenth celebration in a Texas park

    34 minutes ago

    Steve Clarke hoping cuddles and kicked backsides lift Scotland after Germany thrashing

    34 minutes ago

    Bachelor stars Jimmy Nicholson and Holly Kingston announce pregnancy on Instagram

    37 minutes ago

    Judge could soon set trial date for Pa. man charged in killings of 4 University of Idaho students

    37 minutes ago

    Why student loan forgiveness sparks anger: A philosopher, attorney general, sociologist and religious thought expert weigh in

    38 minutes ago

    Super wealthy Americans are flocking to the U.K. to snap up royal-inspired engagement rings - as jewelry experts reveal why more clients are looking overseas

    38 minutes ago

    Video: David Beckham thanks wife Victoria for their 'incredible' family as former footballer leads the Father's Day tributes with Amanda Holden, Amy Dowden and Perrie Edwards

    38 minutes ago

    The Lilo & Stitch Scene That Changed Because Of 9/11

    38 minutes ago

    Ashwath Kaushik, 8, wants to be youngest chess grandmaster in Singapore

    38 minutes ago

    Cuddles and kicked backsides needed to lift Scots, says Clarke

    38 minutes ago

    Penrith gifted by clumsy work

    38 minutes ago

    “I was two years old but got memories about it” - 15-year-NBA veteran recalled his father passing away on the basketball court