You don't have to be rich to make money. Furthermore, you don't have to have a lot of money to begin making money almost immediately.
An easy way to get started is to invest in great dividend stocks. With a matter of months (or less), the dividends will begin flowing in.
Which dividend stocks are good picks? Here are three of the smartest dividend stocks to buy with $500, in my opinion.
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1. Archer-Daniels-Midland
Archer-Daniels-Midland (ADM -0.06%), usually referred to as ADM, ranks among the world's largest agribusiness companies. Founded in 1902, ADM supplies agricultural products and services to more than 180 countries.
The company's forward dividend yield stands at 3.26%. Even better, ADM is a Dividend King, with 53 consecutive years of dividend increases. It has also paid dividends for 375 consecutive quarters. That's 93 years of uninterrupted dividend payments.
Why buy ADM stock now? Despite a solid year-to-date gain, the agricultural leader's shares remain attractively valued. ADM's forward price-to-earnings (P/E) ratio is 15.9. That multiple is well below the consumer staples sector's average forward P/E of 22.2.
There's also considerable uncertainty in the stock market, with the full impact of tariffs yet to be felt and many stocks trading at historically high premiums. ADM's business should be relatively stable regardless of what happens, though, because people always need to eat.
ADM's share price is below $65 right now. At that price, you can afford to scoop up a couple of shares and still have plenty remaining to buy the other two stocks on the list.
2. AbbVie
AbbVie (ABBV 1.11%) is one of the world's biggest pharmaceutical companies. It markets around a dozen blockbuster drugs, with its top products including Botox, Rinvoq, and Skyrizi.
Like ADM, AbbVie is a Dividend King, with 53 years of consecutive dividend increases. The company has more than quadrupled its dividend payout since spinning off from Abbott Labs in 2013. Its forward dividend yield is currently 3.14%.
Investors have other reasons to like AbbVie in addition to its dividend. The drugmaker should have robust growth prospects in the coming years, thanks to strong growth from several products already on the market and a promising pipeline. This growth also makes AbbVie's valuation attractive: The stock's price-to-earnings-to-growth (PEG) ratio, which is based on analysts' five-year earnings growth projections, is a low 0.44, according to LSEG.
You'll need to shell out around $210 of your initial $500 to buy one share of AbbVie. But with this big pharma company's great dividend and growth opportunities, I think it will be money well spent.
3. Enbridge
Enbridge (ENB 1.21%) operates around 18,085 miles of crude pipeline that transports roughly 30% of crude oil produced in North America. It has 18,952 miles of natural gas and natural gas liquids (NGL) pipelines, plus another 53,600 miles of pipeline operated by DCP Midstream, a joint venture between the company and Phillips 66. Enbridge is also the largest natural gas utility in North America based on volume.
The company offers an especially juicy forward dividend yield of 5.74%. Enbridge is a Dividend Champion, with 30 consecutive years of dividend increases. It expects to continue growing the dividend by up to 5% each year going forward.
This energy stock is a good pick right now, in part due to its dividend, but also because of its stability and growth potential. Enbridge's cash flow is predictable and relatively low risk. The company believes it has around $50 billion of growth opportunities through 2030, with nearly half of them focused on gas transmission.
If you bought two shares of ADM and one share of AbbVie, you'd have at least $160 remaining from your initial $500. That's more than enough to buy three shares of Enbridge, which currently trades below $50 per share.
